EMC Insurance Group (EMCI) versus Selective Insurance Group (SIGI) Critical Survey
EMC Insurance Group (NASDAQ: EMCI) and Selective Insurance Group (NASDAQ:SIGI) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, valuation, institutional ownership, analyst recommendations, profitability, dividends and earnings.
This is a summary of current ratings and recommmendations for EMC Insurance Group and Selective Insurance Group, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|EMC Insurance Group||0||1||0||0||2.00|
|Selective Insurance Group||0||4||0||0||2.00|
EMC Insurance Group presently has a consensus target price of $30.00, suggesting a potential upside of 2.74%. Selective Insurance Group has a consensus target price of $46.91, suggesting a potential downside of 14.70%. Given EMC Insurance Group’s higher probable upside, equities analysts plainly believe EMC Insurance Group is more favorable than Selective Insurance Group.
This table compares EMC Insurance Group and Selective Insurance Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|EMC Insurance Group||5.87%||5.66%||1.98%|
|Selective Insurance Group||7.13%||10.82%||2.32%|
Volatility & Risk
EMC Insurance Group has a beta of 0.92, suggesting that its share price is 8% less volatile than the S&P 500. Comparatively, Selective Insurance Group has a beta of 1.44, suggesting that its share price is 44% more volatile than the S&P 500.
Insider & Institutional Ownership
28.2% of EMC Insurance Group shares are owned by institutional investors. Comparatively, 77.7% of Selective Insurance Group shares are owned by institutional investors. 4.5% of EMC Insurance Group shares are owned by insiders. Comparatively, 3.0% of Selective Insurance Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Earnings & Valuation
This table compares EMC Insurance Group and Selective Insurance Group’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|EMC Insurance Group||$649.90 million||0.96||$38.22 million||$1.79||16.31|
|Selective Insurance Group||$2.38 billion||1.35||$313.01 million||$2.88||19.10|
Selective Insurance Group has higher revenue and earnings than EMC Insurance Group. EMC Insurance Group is trading at a lower price-to-earnings ratio than Selective Insurance Group, indicating that it is currently the more affordable of the two stocks.
EMC Insurance Group pays an annual dividend of $0.84 per share and has a dividend yield of 2.9%. Selective Insurance Group pays an annual dividend of $0.64 per share and has a dividend yield of 1.2%. EMC Insurance Group pays out 46.9% of its earnings in the form of a dividend. Selective Insurance Group pays out 22.2% 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.
Selective Insurance Group beats EMC Insurance Group on 11 of the 14 factors compared between the two stocks.
About EMC Insurance Group
EMC Insurance Group Inc. is an insurance holding company. The Company operates through two segments: Property and Casualty Insurance and Reinsurance segment. It conducts its property and casualty insurance operations through its subsidiaries, including EMCASCO Insurance Company, Illinois EMCASCO Insurance Company and Dakota Fire Insurance Company, and its reinsurance operations through its subsidiary, EMC Reinsurance Company. The Company focuses on the sale of commercial lines of property and casualty insurance to small and medium-sized businesses. The Company offered its insurance products in 41 states, as of December 31, 2016. The Company is owned by Employers Mutual Casualty Company (Employers Mutual), a multiple-line property and casualty insurance company. The Company’s insurance agency, EMC Underwriters, LLC (EMC Underwriters), specializes in marketing excess and surplus lines of insurance.
About Selective Insurance Group
Selective Insurance Group, Inc. is a holding company. As of December 31, 2016, the Company had 10 insurance subsidiaries, nine of which were licensed by various state departments of insurance to write specific lines of property and casualty insurance business. The remaining subsidiary is authorized by various state insurance departments to write property and casualty insurance in the excess and surplus lines (E&S) market. Its segments include Standard Commercial Lines, which consists of insurance products and services provided in the standard marketplace; Standard Personal Lines, which consists of insurance products and services, including flood insurance coverage that it writes through the National Flood Insurance Program (NFIP); E&S Lines, which consists of insurance products and services provided to customers not obtaining coverage in the standard marketplace, and investment segment invests insurance premiums, as well as amounts generated through its capital management strategies.
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