National General (NASDAQ: UFCS) and United Fire Group (NASDAQ:UFCS) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, institutional ownership, risk, valuation, earnings and dividends.

Risk & Volatility

National General has a beta of 0.95, meaning that its stock price is 5% less volatile than the S&P 500. Comparatively, United Fire Group has a beta of 0.48, meaning that its stock price is 52% less volatile than the S&P 500.

Dividends

National General pays an annual dividend of $0.16 per share and has a dividend yield of 0.6%. United Fire Group pays an annual dividend of $1.24 per share and has a dividend yield of 2.5%. National General pays out 14.7% of its earnings in the form of a dividend. National General has raised its dividend for 3 consecutive years and United Fire Group has raised its dividend for 4 consecutive years. United Fire Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of current ratings and price targets for National General and United Fire Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
National General 0 2 4 0 2.67
United Fire Group 0 1 1 0 2.50

National General currently has a consensus price target of $29.83, indicating a potential upside of 9.04%. United Fire Group has a consensus price target of $53.00, indicating a potential upside of 6.26%. Given National General’s stronger consensus rating and higher possible upside, analysts clearly believe National General is more favorable than United Fire Group.

Profitability

This table compares National General and United Fire Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
National General 3.36% 12.35% 2.21%
United Fire Group 6.93% 3.04% 0.83%

Insider & Institutional Ownership

51.5% of National General shares are held by institutional investors. Comparatively, 60.3% of United Fire Group shares are held by institutional investors. 3.4% of National General shares are held by insiders. Comparatively, 6.2% of United Fire Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares National General and United Fire Group’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
National General $4.43 billion 0.66 $105.84 million $1.09 25.10
United Fire Group $1.05 billion 1.19 $51.02 million N/A N/A

National General has higher revenue and earnings than United Fire Group.

About National General

National General Holdings Corp., a specialty personal lines insurance holding company, provides various insurance products and services in the United States. The company operates in two segments, Property and Casualty, and Accident and Health. The Property and Casualty segment offers standard, preferred, and nonstandard automobile insurance products; and recreational vehicle (RV) insurance products that carry RV-specific endorsements comprising automatic personal effects coverage, optional replacement cost coverage, RV storage coverage, and full-time liability coverage. It also provides homeowners policies consisting of property and liability coverages for one-and two-family, and owner-occupied residences, as well as additional personal umbrella coverage to the homeowners. In addition, this segment offers small business automobile insurance products, which covers liability and physical damage caused by light-to-medium duty commercial vehicles; motorcycle insurance products for various types of motorcycles, as well as golf carts and all-terrain vehicles; and lender-placed insurance products, including fire, home, and flood products, as well as collateral protection insurance and guaranteed asset protection products for automobiles. The Accident and Health segment provides accident and non-major medical health insurance products, such as accident/AD&D coverage in the event of bodily injury or death due to accidental means; hospital indemnity; short term coverage post discharge from acute care/rehab center to the nursing home setting; and short-term medical plans. This segment also offers cancer/critical illness policies, stop loss programs for small and large employers, and basic dental and vision coverage products. In addition, it distributes life and health insurance to groups and individuals. The company was formerly known as American Capital Acquisition Corporation. National General Holdings Corp. was founded in 1939 and is headquartered in New York, New York.

About United Fire Group

United Fire Group, Inc., together with its subsidiaries, provides insurance protection for individuals and businesses in the United States. The company operates through two segments, Property and Casualty Insurance, and Life Insurance. The Property and Casualty Insurance segment offers commercial and personal lines of property and casualty insurance, as well as assumed reinsurance products. Its commercial policies include fire and allied lines, other liability, automobile, workers' compensation, and surety coverage; and personal lines consists of automobile, and fire and allied lines coverage, including homeowners. The Life Insurance segment underwrites deferred and immediate fixed annuities; universal life insurance products; and traditional life insurance products, such as term life insurance and whole life insurance products. The company sells its products through a network of independent agencies. United Fire Group, Inc. was founded in 1946 and is headquartered in Cedar Rapids, Iowa.

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