James River Group Holdings (NASDAQ: JRVR) and The Travelers Companies (NYSE:TRV) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their earnings, analyst recommendations, valuation, institutional ownership, dividends, profitability and risk.

Insider and Institutional Ownership

92.7% of James River Group Holdings shares are owned by institutional investors. Comparatively, 77.5% of The Travelers Companies shares are owned by institutional investors. 41.0% of James River Group Holdings shares are owned by company insiders. Comparatively, 0.8% of The Travelers Companies shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Risk and Volatility

James River Group Holdings has a beta of 0.55, meaning that its stock price is 45% less volatile than the S&P 500. Comparatively, The Travelers Companies has a beta of 1.2, meaning that its stock price is 20% more volatile than the S&P 500.

Dividends

James River Group Holdings pays an annual dividend of $1.20 per share and has a dividend yield of 3.0%. The Travelers Companies pays an annual dividend of $2.88 per share and has a dividend yield of 2.3%. James River Group Holdings pays out 45.3% of its earnings in the form of a dividend. The Travelers Companies pays out 28.8% 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. The Travelers Companies has raised its dividend for 8 consecutive years.

Analyst Recommendations

This is a breakdown of recent ratings for James River Group Holdings and The Travelers Companies, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
James River Group Holdings 0 1 2 0 2.67
The Travelers Companies 4 6 5 0 2.07

James River Group Holdings presently has a consensus target price of $44.67, indicating a potential upside of 12.71%. The Travelers Companies has a consensus target price of $124.03, indicating a potential downside of 1.93%. Given James River Group Holdings’ stronger consensus rating and higher possible upside, research analysts plainly believe James River Group Holdings is more favorable than The Travelers Companies.

Valuation and Earnings

This table compares James River Group Holdings and The Travelers Companies’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
James River Group Holdings $699.18 million 1.67 $97.44 million $2.65 14.95
The Travelers Companies $28.15 billion 1.24 $4.86 billion $10.01 12.63

The Travelers Companies has higher revenue and earnings than James River Group Holdings. The Travelers Companies is trading at a lower price-to-earnings ratio than James River Group Holdings, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares James River Group Holdings and The Travelers Companies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
James River Group Holdings 11.45% 10.80% 3.21%
The Travelers Companies 10.15% 11.68% 2.73%

Summary

James River Group Holdings beats The Travelers Companies on 9 of the 17 factors compared between the two stocks.

James River Group Holdings Company Profile

James River Group Holdings, Ltd. (JRG Holdings) is an insurance and reinsurance holding company. The Company operates through four segments: Excess and Surplus Lines, Specialty Admitted Insurance, Casualty Reinsurance, and Corporate and Other. The Excess and Surplus Lines segment offers commercial excess and surplus lines liability and excess property insurance products. The Specialty Admitted Insurance segment offers workers’ compensation insurance coverage, as well as specialty admitted fronting and program business. The Casualty Reinsurance segment offers commercial liability and non-catastrophe property reinsurance to the United States insurance companies and to its the United States-based insurance subsidiaries. The Corporate and Other segment consists of certain management and treasury activities of James River Group, Inc., James River Group Holdings UK Limited and JRG Holdings. It owns six insurance companies focused on specialty insurance niches and a reinsurance company.

The Travelers Companies Company Profile

The Travelers Companies, Inc. is a holding company. The Company’s segments include Business and International Insurance; Bond & Specialty Insurance, and Personal Insurance. Through its subsidiaries, it provides commercial and personal property and casualty insurance products and services. The Business and International Insurance segment offers property and casualty insurance and insurance related services to its clients, in the United States and in Canada, as well as in the United Kingdom, the Republic of Ireland, Brazil and throughout other parts of the world. The Bond & Specialty Insurance segment provides surety, fidelity, management liability, professional liability, and other property and casualty coverages and related risk management services to a range of primarily domestic customers, utilizing various degrees of financially-based underwriting approaches. The Personal Insurance segment writes a range of property and casualty insurance covering individuals’ personal risks.

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