Financial Review: Sampo (OTCMKTS:SAXPY) versus Selective Insurance Group (NASDAQ:SIGI)

Selective Insurance Group (NASDAQ:SIGI) and Sampo (OTCMKTS:SAXPY) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their dividends, earnings, valuation, risk, profitability, institutional ownership and analyst recommendations.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Selective Insurance Group	7.78%	12.96%	2.82%
Sampo	N/A	19.32%	5.57%

Dividends

Selective Insurance Group pays an annual dividend of $1.72 per share and has a dividend yield of 2.1%. Sampo pays an annual dividend of $0.32 per share and has a dividend yield of 1.4%. Selective Insurance Group pays out 26.5% of its earnings in the form of a dividend. Sampo pays out 23.0% 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. Selective Insurance Group has raised its dividend for 11 consecutive years. Selective Insurance Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

82.9% of Selective Insurance Group shares are held by institutional investors. Comparatively, 0.0% of Sampo shares are held by institutional investors. 1.0% of Selective Insurance Group shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Volatility & Risk

Selective Insurance Group has a beta of 0.24, suggesting that its stock price is 76% less volatile than the S&P 500. Comparatively, Sampo has a beta of 0.45, suggesting that its stock price is 55% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Selective Insurance Group and Sampo, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Selective Insurance Group	1	6	1	0	2.00
Sampo	0	2	0	1	2.67

Selective Insurance Group presently has a consensus price target of $81.60, suggesting a potential downside of 1.83%. Given Selective Insurance Group’s higher probable upside, research analysts plainly believe Selective Insurance Group is more favorable than Sampo.

Valuation and Earnings

This table compares Selective Insurance Group and Sampo”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Selective Insurance Group	$4.86 billion	1.03	$207.01 million	$6.49	12.81
Sampo	$2.47 billion	49.82	$1.25 billion	$1.39	16.57

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

About Selective Insurance Group

Selective Insurance Group, Inc., together with its subsidiaries, provides insurance products and services in the United States. The company operates through four segments: Standard Commercial Lines, Standard Personal Lines, E&S Lines, and Investments. It offers casualty insurance products that covers the financial consequences of employee injuries in the course of employment and bodily injury and/or property damage to a third party; property insurance products, which covers the accidental loss of an insured's real property, personal property, and/or earnings due to the property's loss; and flood insurance products. The company also invests in fixed income investments and commercial mortgage loans, as well as equity securities, short-term investments, and alternative investments, and other investments. It offers its insurance products and services to businesses, non-profit organizations, local government agencies, and individuals through independent retail agents and wholesale general agents. The company was founded in 1926 and is headquartered in Branchville, New Jersey.

About Sampo

Sampo Oyj, together with its subsidiaries, engages in the provision of non-life insurance products and services in Finland, Sweden, Norway, Denmark, Estonia, Lithuania, Latvia, and the United Kingdom. The company operates through If, Topdanmark, Hastings, Mandatum, and Holding segments. It offers property, casualty, liability, accident, sickness, household, homeowner, motor, travel, marine, aviation, transport, forest, livestock, health, workers compensation, car, van, and bike insurance services, as well as reinsurance services. The company was founded in 1909 and is based in Helsinki, Finland.