EMC Insurance Group (EMCI) & ProAssurance (PRA) Financial Comparison

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

Institutional & Insider Ownership

28.1% of EMC Insurance Group shares are owned by institutional investors. Comparatively, 79.9% of ProAssurance shares are owned by institutional investors. 4.5% of EMC Insurance Group shares are owned by company insiders. Comparatively, 1.8% of ProAssurance shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and recommmendations for EMC Insurance Group and ProAssurance, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
EMC Insurance Group 0 1 0 0 2.00
ProAssurance 0 3 0 0 2.00

EMC Insurance Group presently has a consensus price target of $32.00, indicating a potential upside of 20.21%. ProAssurance has a consensus price target of $57.50, indicating a potential upside of 11.22%. Given EMC Insurance Group’s higher possible upside, equities analysts clearly believe EMC Insurance Group is more favorable than ProAssurance.

Valuation & Earnings

This table compares EMC Insurance Group and ProAssurance’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
EMC Insurance Group $652.29 million 0.88 $39.24 million $1.84 14.47
ProAssurance $870.21 million 3.17 $151.08 million $2.69 19.22

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

Profitability

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

Net Margins Return on Equity Return on Assets
EMC Insurance Group 6.02% 4.54% 1.59%
ProAssurance 16.18% 6.75% 2.50%

Dividends

EMC Insurance Group pays an annual dividend of $0.88 per share and has a dividend yield of 3.3%. ProAssurance pays an annual dividend of $1.24 per share and has a dividend yield of 2.4%. EMC Insurance Group pays out 47.8% of its earnings in the form of a dividend. ProAssurance pays out 46.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Volatility & Risk

EMC Insurance Group has a beta of 0.93, indicating that its share price is 7% less volatile than the S&P 500. Comparatively, ProAssurance has a beta of 0.47, indicating that its share price is 53% less volatile than the S&P 500.

Summary

ProAssurance beats EMC Insurance Group on 10 of the 14 factors compared between the two stocks.

EMC Insurance Group Company Profile

EMC Insurance Group Inc. is an insurance holding company. The Company operates through two segments: Property and Casualty Insurance and Reinsurance segment. It conducts its property and casualty insurance operations through its subsidiaries, including EMCASCO Insurance Company, Illinois EMCASCO Insurance Company and Dakota Fire Insurance Company, and its reinsurance operations through its subsidiary, EMC Reinsurance Company. The Company focuses on the sale of commercial lines of property and casualty insurance to small and medium-sized businesses. The Company offered its insurance products in 41 states, as of December 31, 2016. The Company is owned by Employers Mutual Casualty Company (Employers Mutual), a multiple-line property and casualty insurance company. The Company’s insurance agency, EMC Underwriters, LLC (EMC Underwriters), specializes in marketing excess and surplus lines of insurance.

ProAssurance Company Profile

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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