Analyzing National Interstate (NATL) and Alterra Capital (ALTE)

National Interstate (NASDAQ: NATL) and Alterra Capital (NASDAQ:ALTE) are both financials companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, earnings, dividends, analyst recommendations, risk, valuation and institutional ownership.

Institutional & Insider Ownership

84.9% of National Interstate shares are held by institutional investors. 11.8% of National Interstate shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Valuation and Earnings

This table compares National Interstate and Alterra Capital’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
National Interstate N/A N/A N/A $1.38 23.56
Alterra Capital N/A N/A N/A $1.65 19.73

Alterra Capital is trading at a lower price-to-earnings ratio than National Interstate, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current ratings for National Interstate and Alterra Capital, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
National Interstate 0 0 0 0 N/A
Alterra Capital 0 0 0 0 N/A

Dividends

National Interstate pays an annual dividend of $0.56 per share and has a dividend yield of 1.7%. Alterra Capital does not pay a dividend. National Interstate pays out 40.6% of its earnings in the form of a dividend.

Profitability

This table compares National Interstate and Alterra Capital’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
National Interstate 5.91% 10.13% 1.94%
Alterra Capital N/A N/A N/A

Summary

National Interstate beats Alterra Capital on 7 of the 9 factors compared between the two stocks.

National Interstate Company Profile

National Interstate Corporation and its subsidiaries operate as an insurance holding company that underwrites and sells traditional and alternative property and casualty insurance products to the passenger transportation, trucking and moving and storage industries, general commercial insurance to small businesses in Hawaii and Alaska and personal insurance to owners of recreational vehicles throughout the United States. The Company is a specialty property and casualty insurance company with a focus on the transportation industry. The Company operates through property and casualty insurance segment. The Company offers approximately 40 product lines in the specialty property and casualty insurance market, which it groups into approximately four general business components: alternative risk transfer (ART), transportation, specialty personal lines, and Hawaii and Alaska based on the class of business, insureds’ risk participation or geographic location.

Alterra Capital Company Profile

Alterra Capital Holdings Limited (Alterra) is engaged in providing diversified specialty insurance and reinsurance products to corporations, public entities and property and casualty insurers. In Bermuda, the Company conducts its insurance and reinsurance operations through Alterra Bermuda. In Europe, the Company conducts its non-Lloyd’s operations primarily from Dublin, Ireland through Alterra Europe. In the United States, the Company’s U.S. reinsurance operations are conducted through Alterra Re USA, a Connecticut-domiciled reinsurance company. The Company’s U.S. insurance operations are conducted through Alterra E&S. In Latin America, the Company provides reinsurance to clients through Alterra at Lloyd’s in Rio de Janeiro, Brazil, using Lloyd’s admitted status, through Alterra Europe. In June 2012, the Company formed New Point V Limited. On May 1, 2013, Alterra Capital was acquired by Markel Corporation.

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