Markel (NYSE: MKL) and Federated National (NASDAQ:FNHC) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, valuation, analyst recommendations, institutional ownership, earnings, dividends and profitability.
Federated National pays an annual dividend of $0.32 per share and has a dividend yield of 2.0%. Markel does not pay a dividend. Federated National pays out -45.7% of its earnings in the form of a dividend.
Markel has a beta of 1.04, indicating that its share price is 4% more volatile than the S&P 500. Comparatively, Federated National has a beta of 1.52, indicating that its share price is 52% more volatile than the S&P 500.
This is a summary of current ratings and recommmendations for Markel and Federated National, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Markel presently has a consensus price target of $1,066.67, indicating a potential downside of 6.32%. Federated National has a consensus price target of $22.00, indicating a potential upside of 35.55%. Given Federated National’s stronger consensus rating and higher possible upside, analysts clearly believe Federated National is more favorable than Markel.
Valuation and Earnings
This table compares Markel and Federated National’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Markel||$5.61 billion||2.82||$455.68 million||$4.50||253.04|
|Federated National||$316.38 million||0.67||-$190,000.00||($0.70)||-23.19|
Markel has higher revenue and earnings than Federated National. Federated National is trading at a lower price-to-earnings ratio than Markel, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
76.8% of Markel shares are held by institutional investors. Comparatively, 62.3% of Federated National shares are held by institutional investors. 2.5% of Markel shares are held by insiders. Comparatively, 10.8% of Federated National shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
This table compares Markel and Federated National’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Markel beats Federated National on 9 of the 15 factors compared between the two stocks.
Markel Company Profile
Markel Corporation is a financial holding company serving a range of markets. The Company’s principal business markets and underwrites specialty insurance products. It monitors and reports its ongoing underwriting operations in three segments: U.S. Insurance, International Insurance and Reinsurance. The Company, through its subsidiary Markel Ventures, Inc. (Markel Ventures), owns interests in various industrial and service businesses that operate outside of the specialty insurance marketplace. The U.S. Insurance segment includes all direct business and facultative placements written by its insurance subsidiaries domiciled in the United States. The International Insurance segment includes all direct business and facultative placements written by its insurance subsidiaries domiciled outside of the United States, including its syndicate at Lloyd’s of London (Lloyd’s). The Reinsurance segment includes all treaty reinsurance written across the Company.
Federated National Company Profile
Federated National Holding Company (FNHC) is an insurance holding company that controls all steps in the insurance underwriting, distribution and claims processes through its subsidiaries and its contractual relationships with its independent agents and general agents. The Company is authorized to underwrite homeowners’ multi-peril (homeowners), commercial general liability, federal flood, personal auto and various other lines of insurance in Florida and various other states. The Company markets, distributes and services its own and third-party insurers’ products and its other services through a network of independent agents. The Company’s insurance lines of business include Homeowners’ Property and Casualty Insurance, Commercial General Liability, Personal Automobile and Flood. FNIC and MNIC underwrite homeowners’ insurance in Florida, and FNIC underwrites insurance in Alabama, Louisiana and South Carolina. Alabama and Louisiana.
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