Financial Analysis: Loews Corporation (L) and State National Companies (SNC)
Loews Corporation (NYSE: L) and State National Companies (NASDAQ:SNC) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, earnings, institutional ownership, valuation, risk, analyst recommendations and dividends.
Loews Corporation pays an annual dividend of $0.25 per share and has a dividend yield of 0.5%. State National Companies pays an annual dividend of $0.24 per share and has a dividend yield of 1.1%. Loews Corporation pays out 7.5% of its earnings in the form of a dividend. State National Companies pays out 18.8% 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.
This is a summary of current recommendations and price targets for Loews Corporation and State National Companies, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|State National Companies||1||1||2||0||2.25|
Loews Corporation currently has a consensus target price of $39.00, suggesting a potential downside of 17.88%. State National Companies has a consensus target price of $38.00, suggesting a potential upside of 80.78%. Given State National Companies’ stronger consensus rating and higher probable upside, analysts plainly believe State National Companies is more favorable than Loews Corporation.
Institutional & Insider Ownership
58.6% of Loews Corporation shares are held by institutional investors. Comparatively, 57.2% of State National Companies shares are held by institutional investors. 11.8% of Loews Corporation shares are held by insiders. Comparatively, 34.8% of State National Companies shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Volatility and Risk
Loews Corporation has a beta of 0.71, suggesting that its share price is 29% less volatile than the S&P 500. Comparatively, State National Companies has a beta of 1.09, suggesting that its share price is 9% more volatile than the S&P 500.
This table compares Loews Corporation and State National Companies’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|State National Companies||22.98%||17.65%||1.80%|
Earnings and Valuation
This table compares Loews Corporation and State National Companies’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Loews Corporation||$13.28 billion||1.20||$3.33 billion||$3.32||14.30|
|State National Companies||$235.57 million||3.76||$91.47 million||$1.28||16.42|
Loews Corporation has higher revenue and earnings than State National Companies. Loews Corporation is trading at a lower price-to-earnings ratio than State National Companies, indicating that it is currently the more affordable of the two stocks.
State National Companies beats Loews Corporation on 11 of the 16 factors compared between the two stocks.
About Loews Corporation
Loews Corporation is a holding company. The Company, through its subsidiaries, is engaged in commercial property and casualty insurance; operation of offshore oil and gas drilling rigs; transportation and storage of natural gas and natural gas liquids, and operation of a chain of hotels. The Company has five segments consisted of its four individual operating subsidiaries, CNA Financial Corporation (CNA), Diamond Offshore Drilling, Inc. (Diamond Offshore), Boardwalk Pipeline Partners, LP (Boardwalk Pipeline) and Loews Hotels Holding Corporation (Loews Hotels), and the Corporate segment. CNA’s insurance products include commercial property and casualty coverages, including surety. CNA’s services include risk management, information services, warranty and claims administration. CNA’s core business, commercial property and casualty insurance operations include Specialty, Commercial and International lines of business.
About State National Companies
State National Companies, Inc. is a specialty provider of property and casualty insurance. The Company’s segments include Program Services, Lender Services and Corporate. In the Program Services segment, the Company operates an issuing carrier (fronting) business to provide insurance capacity access to the United States property and casualty insurance markets. In the Lender Services segment, the Company specializes in providing collateral protection insurance, which insures automobiles held as collateral for loans made by financial institutions. The Company writes its insurance business through its insurance company subsidiaries, which include State National Insurance Company, Inc. (SNIC), National Specialty Insurance Company (NSIC) and United Specialty Insurance Company (USIC). As of December 31, 2016, SNIC and NSIC were admitted carriers licensed to write property and casualty business in all 50 states and the District of Columbia. USIC is an admitted carrier in Delaware.
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