Genworth Financial (NYSE: GNW) and AMERISAFE (NASDAQ:AMSF) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, risk, earnings, dividends, institutional ownership, valuation and profitability.

Profitability

This table compares Genworth Financial and AMERISAFE’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Genworth Financial -1.66% -1.63% -0.23%
AMERISAFE 17.17% 14.04% 4.32%

Volatility & Risk

Genworth Financial has a beta of 2.7, meaning that its share price is 170% more volatile than the S&P 500. Comparatively, AMERISAFE has a beta of 0.88, meaning that its share price is 12% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations for Genworth Financial and AMERISAFE, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Genworth Financial 0 3 2 0 2.40
AMERISAFE 0 1 1 0 2.50

Genworth Financial presently has a consensus target price of $4.36, suggesting a potential upside of 25.02%. AMERISAFE has a consensus target price of $64.00, suggesting a potential upside of 8.84%. Given Genworth Financial’s higher possible upside, equities analysts clearly believe Genworth Financial is more favorable than AMERISAFE.

Earnings and Valuation

This table compares Genworth Financial and AMERISAFE’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Genworth Financial $8.74 billion 0.20 $852.00 million ($0.30) -11.63
AMERISAFE $384.23 million 2.93 $95.81 million $3.43 17.14

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

Dividends

AMERISAFE pays an annual dividend of $0.80 per share and has a dividend yield of 1.4%. Genworth Financial does not pay a dividend. AMERISAFE pays out 23.3% of its earnings in the form of a dividend.

Insider and Institutional Ownership

67.6% of Genworth Financial shares are owned by institutional investors. Comparatively, 99.5% of AMERISAFE shares are owned by institutional investors. 0.3% of Genworth Financial shares are owned by company insiders. Comparatively, 2.2% of AMERISAFE shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

AMERISAFE beats Genworth Financial on 9 of the 15 factors compared between the two stocks.

Genworth Financial Company Profile

Genworth Financial, Inc. (Genworth) is a financial security company. The Company provides insurance, wealth management, investment and financial solutions. As of December 31, 2011, the Company had more than 15 million customers, with a presence in more than 25 countries. The Company operates in Insurance, Mortgage Insurance and Corporate and Runoff. The Mortgage Insurance Division includes the business segments, such as International Mortgage Insurance and U.S. Mortgage Insurance. The Corporate and Runoff Division includes the Runoff segment and Corporate and Other activities. In September 2013, Genworth Financial, Inc closed the sale of its Wealth Management business, including Genworth Financial Wealth Management and alternative solutions provider, the Altegris companies, to a partnership of Aquiline Capital Partners and Genstar Capital.

AMERISAFE Company Profile

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.

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