AMERISAFE (AMSF) & Genworth Financial (GNW) Critical Analysis
AMERISAFE (NASDAQ: AMSF) and Genworth Financial (NYSE:GNW) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, earnings, valuation, institutional ownership, risk and dividends.
This table compares AMERISAFE and Genworth Financial’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Volatility and Risk
AMERISAFE has a beta of 0.88, suggesting that its share price is 12% less volatile than the S&P 500. Comparatively, Genworth Financial has a beta of 2.7, suggesting that its share price is 170% more volatile than the S&P 500.
Insider & Institutional Ownership
99.5% of AMERISAFE shares are held by institutional investors. Comparatively, 67.6% of Genworth Financial shares are held by institutional investors. 2.2% of AMERISAFE shares are held by insiders. Comparatively, 0.3% of Genworth Financial shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
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.
This is a summary of current recommendations and price targets for AMERISAFE and Genworth Financial, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
AMERISAFE presently has a consensus target price of $64.00, suggesting a potential upside of 8.11%. Genworth Financial has a consensus target price of $4.36, suggesting a potential upside of 25.38%. Given Genworth Financial’s higher probable upside, analysts clearly believe Genworth Financial is more favorable than AMERISAFE.
Earnings & Valuation
This table compares AMERISAFE and Genworth Financial’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|AMERISAFE||$384.23 million||2.95||$95.81 million||$3.43||17.26|
|Genworth Financial||$8.74 billion||0.20||$852.00 million||($0.30)||-11.60|
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.
AMERISAFE beats Genworth Financial on 9 of the 15 factors compared between the two stocks.
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.
About Genworth Financial
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.
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