AMERISAFE (NASDAQ: AMSF) and Fidelity and Guaranty Life (NYSE:FGL) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, profitability, risk, analyst recommendations, institutional ownership, dividends and earnings.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for AMERISAFE and Fidelity and Guaranty Life, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AMERISAFE 0 0 1 0 3.00
Fidelity and Guaranty Life 0 2 0 0 2.00

AMERISAFE presently has a consensus target price of $64.00, indicating a potential upside of 13.17%. Fidelity and Guaranty Life has a consensus target price of $26.40, indicating a potential downside of 15.25%. Given AMERISAFE’s stronger consensus rating and higher probable upside, research analysts plainly believe AMERISAFE is more favorable than Fidelity and Guaranty Life.

Risk and Volatility

AMERISAFE has a beta of 0.87, indicating that its share price is 13% less volatile than the S&P 500. Comparatively, Fidelity and Guaranty Life has a beta of 0.9, indicating that its share price is 10% less volatile than the S&P 500.

Dividends

AMERISAFE pays an annual dividend of $0.80 per share and has a dividend yield of 1.4%. Fidelity and Guaranty Life pays an annual dividend of $0.26 per share and has a dividend yield of 0.8%. AMERISAFE pays out 23.3% of its earnings in the form of a dividend. Fidelity and Guaranty Life pays out 7.9% 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.

Institutional & Insider Ownership

99.7% of AMERISAFE shares are owned by institutional investors. Comparatively, 24.6% of Fidelity and Guaranty Life shares are owned by institutional investors. 2.2% of AMERISAFE shares are owned by company insiders. Comparatively, 0.6% of Fidelity and Guaranty Life shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares AMERISAFE and Fidelity and Guaranty Life’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
AMERISAFE $384.23 million 2.82 $95.81 million $3.43 16.49
Fidelity and Guaranty Life $1.41 billion 1.30 $550.00 million $3.29 9.47

Fidelity and Guaranty Life has higher revenue and earnings than AMERISAFE. Fidelity and Guaranty Life is trading at a lower price-to-earnings ratio than AMERISAFE, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares AMERISAFE and Fidelity and Guaranty Life’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AMERISAFE 17.17% 14.04% 4.32%
Fidelity and Guaranty Life 13.61% 8.00% 0.55%

Summary

AMERISAFE beats Fidelity and Guaranty Life on 12 of the 16 factors compared between the two stocks.

About AMERISAFE

Amerisafe, Inc. is an insurance holding company. The Company is engaged in providing workers’ compensation insurance focused on small to mid-sized employers engaged in hazardous industries, principally construction, trucking, logging and lumber, manufacturing, and agriculture. It is engaged in underwriting the workers’ compensation exposures inherent in these industries. It provides coverage to employers under state and federal workers’ compensation laws. The Company’s workers’ compensation insurance policies provide benefits to injured employees for, temporary or permanent disability, death and medical and hospital expenses. The Company provides safety services at employers’ workplaces as a component of its underwriting process. It utilizes claims management practices. In addition to its voluntary workers’ compensation business, it underwrites workers’ compensation policies for employers assigned to the Company and assumes reinsurance premiums from mandatory pooling arrangements.

About Fidelity and Guaranty Life

Fidelity & Guaranty Life (FGL) is a holding company focused on obtaining controlling equity stakes in companies that operate across various industries. FGL’s primary business is the sale of individual life insurance products and annuities through independent agents, managing general agents, and specialty brokerage firms and in selected institutional markets. FGL’s principal products are deferred annuities (including fixed indexed annuity (FIA) contracts), immediate annuities and life insurance products. FGL markets products through its insurance subsidiaries, Fidelity & Guaranty Life Insurance Company (FGL Insurance) and Fidelity & Guaranty Life Insurance Company of New York (FGL NY Insurance). It distributes and services primarily fixed rate annuities, including FIAs. The Company provides FIA’s for pre-retirement wealth accumulation and post-retirement income management. Its life insurance provides wealth protection and transfer opportunities through indexed universal life products.

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