Partnerre (NYSE: PRE) and Validus Holdings (NYSE:VR) are both mid-cap financials companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, profitability, dividends, institutional ownership, valuation, analyst recommendations and earnings.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Partnerre and Validus Holdings, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Partnerre 0 0 0 0 N/A
Validus Holdings 0 3 1 0 2.25

Validus Holdings has a consensus target price of $58.25, suggesting a potential upside of 12.52%. Given Validus Holdings’ higher probable upside, analysts clearly believe Validus Holdings is more favorable than Partnerre.

Valuation and Earnings

This table compares Partnerre and Validus Holdings’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Partnerre N/A N/A N/A N/A N/A
Validus Holdings $2.48 billion 1.66 $538.06 million $3.63 14.26

Validus Holdings has higher revenue and earnings than Partnerre.

Profitability

This table compares Partnerre and Validus Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Partnerre -14.76% -11.13% -2.58%
Validus Holdings 11.81% 7.75% 2.55%

Institutional and Insider Ownership

97.8% of Validus Holdings shares are owned by institutional investors. 2.3% of Validus Holdings shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Dividends

Validus Holdings pays an annual dividend of $1.52 per share and has a dividend yield of 2.9%. Partnerre does not pay a dividend. Validus Holdings pays out 41.9% of its earnings in the form of a dividend. Partnerre has raised its dividend for 14 consecutive years and Validus Holdings has raised its dividend for 2 consecutive years.

Summary

Validus Holdings beats Partnerre on 9 of the 12 factors compared between the two stocks.

Partnerre Company Profile

PartnerRe Ltd. is the holding company engaged in the international reinsurance and insurance business. The Company operates in three segments: Non-life, Life and Health, and Corporate and Other. The Non-life segment’s operations are classified as North America, Global (Non-U.S.) Property and Casualty (Global (Non-U.S.) P&C), Global Specialty and Catastrophe. The Company’s Life and Health segment includes the mortality, longevity and accident and health lines of business. The Corporate and Other segment is engaged in investment related activities. Risks reinsured by the Company include property, casualty, motor, agriculture, aviation/space, catastrophe, credit/surety, engineering, energy, marine, specialty property, specialty casualty, multiline and other lines, mortality, longevity, accident and health, and alternative risk products. The Company’s alternative risk products include weather and credit protection to financial, industrial and service companies.

Validus Holdings Company Profile

Validus Holdings, Ltd. is a holding company. The Company operates through four segments: Validus Re, Talbot, Western World and AlphaCat. Validus Re is a Bermuda-based reinsurance segment focused treaty reinsurance. Validus Re concentrates on first-party property and other reinsurance risks. Talbot is a specialty insurance segment operating within the Lloyd’s insurance market through Syndicate 1183. The Talbot segment is focused on a range of marine and energy, political lines, commercial property, financial lines, contingency, accident and health and aviation classes of business. Western World is a specialty excess and surplus lines insurance segment operating within the United States commercial market. AlphaCat is a Bermuda-based investment advisor, managing capital from third parties and the Company in insurance linked securities and other investments in the property catastrophe reinsurance space.

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