Old Republic International Corporation (NYSE: ORI) and United Fire Group (NASDAQ:UFCS) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their risk, valuation, analyst recommendations, institutional ownership, profitability, dividends and earnings.

Risk & Volatility

Old Republic International Corporation has a beta of 1.3, indicating that its stock price is 30% more volatile than the S&P 500. Comparatively, United Fire Group has a beta of 0.75, indicating that its stock price is 25% less volatile than the S&P 500.

Profitability

This table compares Old Republic International Corporation and United Fire Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Old Republic International Corporation 7.64% 9.41% 2.26%
United Fire Group 4.07% 4.33% 1.01%

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Old Republic International Corporation and United Fire Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Old Republic International Corporation 0 0 0 0 N/A
United Fire Group 0 2 1 0 2.33

United Fire Group has a consensus price target of $46.33, suggesting a potential downside of 0.34%. Given United Fire Group’s higher possible upside, analysts plainly believe United Fire Group is more favorable than Old Republic International Corporation.

Insider & Institutional Ownership

71.2% of Old Republic International Corporation shares are held by institutional investors. Comparatively, 58.2% of United Fire Group shares are held by institutional investors. 2.3% of Old Republic International Corporation shares are held by insiders. Comparatively, 5.8% of United Fire Group shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Old Republic International Corporation and United Fire Group’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Old Republic International Corporation $5.99 billion 0.87 $758.60 million $1.59 12.47
United Fire Group $1.16 billion 1.00 $59.36 million $1.83 25.40

Old Republic International Corporation has higher revenue and earnings than United Fire Group. Old Republic International Corporation is trading at a lower price-to-earnings ratio than United Fire Group, indicating that it is currently the more affordable of the two stocks.

Dividends

Old Republic International Corporation pays an annual dividend of $0.76 per share and has a dividend yield of 3.8%. United Fire Group pays an annual dividend of $1.12 per share and has a dividend yield of 2.4%. Old Republic International Corporation pays out 47.8% of its earnings in the form of a dividend. United Fire Group pays out 61.2% 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. United Fire Group has increased its dividend for 35 consecutive years. Old Republic International Corporation is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Old Republic International Corporation beats United Fire Group on 9 of the 16 factors compared between the two stocks.

About Old Republic International Corporation

Old Republic International Corporation is a holding company. The Company is engaged in business of insurance underwriting and related services. The Company conducts its operations through various regulated insurance company subsidiaries, which are organized into three segments: General Insurance Group, Title Insurance Group and the Republic Financial Indemnity Group (RFIG) Run-off Business. The Company’s General Insurance segment consists of property and liability insurance, and offers coverages to businesses, government and other institutions. The Company’s Title Insurance Group business consists of the issuance of policies to real estate purchasers and investors based upon searches of the public records, which contain information concerning interests in real property. The Company’s RFIG run-off business consists of its mortgage guaranty and consumer credit indemnity (CCI) operations.

About United Fire Group

United Fire Group, Inc., formerly United Fire & Casualty Company, is engaged in the business of writing property and casualty insurance and life insurance and selling annuities. The Company operates in two segments: property and casualty insurance, and life insurance. The Company’s property and casualty insurance segment consists of commercial lines insurance, including surety bonds, personal lines insurance and assumed insurance. Its life insurance segment consists of deferred and immediate annuities, universal life insurance products and traditional life insurance products. Its life insurance segment consists solely of the operations of United Life Insurance Company. On February 1, 2012, the Company completed a holding company reorganization of United Fire Group, Inc., United Fire & Casualty Company and UFC MergeCo, Inc. On March 28, 2011, the Company acquired Mercer Insurance Group, Inc. (Mercer Insurance Group).

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