Contrasting Allstate (ALL) and Montpelier Re (MRH)

Allstate (NYSE: ALL) and Montpelier Re (NYSE:MRH) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their risk, institutional ownership, earnings, profitability, dividends, valuation and analyst recommendations.

Profitability

This table compares Allstate and Montpelier Re’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Allstate 8.28% 12.57% 2.26%
Montpelier Re 35.71% 13.24% 6.70%

Institutional & Insider Ownership

76.9% of Allstate shares are owned by institutional investors. 1.6% of Allstate shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Allstate and Montpelier Re’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Allstate $38.52 billion 0.84 $1.88 billion $8.37 10.86
Montpelier Re N/A N/A N/A $3.84 11.09

Allstate has higher revenue and earnings than Montpelier Re. Allstate is trading at a lower price-to-earnings ratio than Montpelier Re, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current recommendations and price targets for Allstate and Montpelier Re, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Allstate 2 7 4 0 2.15
Montpelier Re 0 0 0 0 N/A

Allstate presently has a consensus target price of $95.31, suggesting a potential upside of 4.86%. Given Allstate’s higher probable upside, equities research analysts clearly believe Allstate is more favorable than Montpelier Re.

Dividends

Allstate pays an annual dividend of $1.48 per share and has a dividend yield of 1.6%. Montpelier Re does not pay a dividend. Allstate pays out 17.7% of its earnings in the form of a dividend. Montpelier Re has raised its dividend for 7 consecutive years.

Summary

Allstate beats Montpelier Re on 7 of the 13 factors compared between the two stocks.

About Allstate

The Allstate Corporation (Allstate) is a holding company for Allstate Insurance Company. The Company’s business is conducted principally through Allstate Insurance Company, Allstate Life Insurance Company and other subsidiaries. It is engaged in the property-liability insurance business and the life insurance, retirement and investment products business. Its segments include Allstate Protection, Allstate Financial, Discontinued Lines and Coverages, and Corporate and Other. The Allstate Protection segment sells private passenger auto, homeowners, and other property-liability insurance products through agencies and directly through contact centers and the Internet. The Allstate Financial segment sells life insurance and voluntary accident and health insurance products. The Corporate and Other segment consists of holding company activities and certain non-insurance operations. Its Discontinued Lines and Coverages segment includes results from property-liability insurance coverage.

About Montpelier Re

Montpelier RE Holdings Ltd. is a holding company. The Company provides customized insurance and reinsurance solutions to the global market. Through its affiliates in Bermuda, it provides institutional and retail investors with direct access to the global property reinsurance market. It operates in three segments: Montpelier Bermuda, which consists of the assets and operations of Montpelier Reinsurance Ltd., which is its wholly owned operating subsidiary based in Pembroke, Bermuda and is registered as a Bermuda Class four insurer; Montpelier at Lloyd’s, which consists of the assets and operations of Montpelier Syndicate 5151, Montpelier Capital Limited, Montpelier at Lloyd’s Limited, Montpelier Underwriting Services Limited and Montpelier Underwriting Inc., and Collateralized Reinsurance, which is marketed under the name Blue Capital. Blue Capital is an asset management platform offering property catastrophe reinsurance-linked investment products to institutional and retail investors.

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