Head-To-Head Review: James River Group (JRVR) & ProAssurance (PRA)

James River Group (NASDAQ: JRVR) and ProAssurance (NYSE:PRA) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, risk, dividends, profitability, valuation, earnings and institutional ownership.

Risk and Volatility

James River Group has a beta of 0.36, meaning that its stock price is 64% less volatile than the S&P 500. Comparatively, ProAssurance has a beta of 0.47, meaning that its stock price is 53% less volatile than the S&P 500.

Profitability

This table compares James River Group and ProAssurance’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
James River Group 8.98% 9.36% 2.66%
ProAssurance 16.18% 6.75% 2.50%

Insider and Institutional Ownership

95.7% of James River Group shares are held by institutional investors. Comparatively, 80.1% of ProAssurance shares are held by institutional investors. 41.0% of James River Group shares are held by company insiders. Comparatively, 1.8% of ProAssurance shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

James River Group pays an annual dividend of $3.20 per share and has a dividend yield of 8.5%. ProAssurance pays an annual dividend of $1.24 per share and has a dividend yield of 2.3%. James River Group pays out 140.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. ProAssurance pays out 46.1% of its earnings in the form of a dividend.

Analyst Ratings

This is a breakdown of current recommendations for James River Group and ProAssurance, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
James River Group 0 2 2 0 2.50
ProAssurance 0 3 0 0 2.00

James River Group currently has a consensus target price of $45.00, indicating a potential upside of 18.95%. ProAssurance has a consensus target price of $57.50, indicating a potential upside of 6.19%. Given James River Group’s stronger consensus rating and higher probable upside, analysts clearly believe James River Group is more favorable than ProAssurance.

Earnings & Valuation

This table compares James River Group and ProAssurance’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
James River Group $586.23 million 1.91 $74.47 million $2.28 16.59
ProAssurance $870.21 million 3.32 $151.08 million $2.69 20.13

ProAssurance has higher revenue and earnings than James River Group. James River Group is trading at a lower price-to-earnings ratio than ProAssurance, indicating that it is currently the more affordable of the two stocks.

About James River Group

James River Group Holdings, Ltd. (JRG Holdings) is an insurance and reinsurance holding company. The Company operates through four segments: Excess and Surplus Lines, Specialty Admitted Insurance, Casualty Reinsurance, and Corporate and Other. The Excess and Surplus Lines segment offers commercial excess and surplus lines liability and excess property insurance products. The Specialty Admitted Insurance segment offers workers’ compensation insurance coverage, as well as specialty admitted fronting and program business. The Casualty Reinsurance segment offers commercial liability and non-catastrophe property reinsurance to the United States insurance companies and to its the United States-based insurance subsidiaries. The Corporate and Other segment consists of certain management and treasury activities of James River Group, Inc., James River Group Holdings UK Limited and JRG Holdings. It owns six insurance companies focused on specialty insurance niches and a reinsurance company.

About ProAssurance

ProAssurance Corporation (ProAssurance) is a holding company for property and casualty insurance companies. The Company provides professional liability insurance for healthcare professionals and facilities, professional liability insurance for attorneys, liability insurance for medical technology and life sciences risks, and workers’ compensation insurance. The Company operates through four segments. The Specialty property and casualty segment includes the Company’s professional liability business, and medical technology and life sciences business. The Workers’ compensation segment includes its workers’ compensation business. Lloyd’s Syndicate 1729 (Syndicate 1729) segment includes business of Syndicate 1729, which underwrites risks over a range of property and casualty insurance and reinsurance lines. The Corporate segment includes the Company’s investment operations managed at the corporate level and non-premium revenues generated outside of its insurance entities.

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