Critical Survey: Axis Capital (NYSE:AXS) versus Stewart Information Services (NYSE:STC)

Axis Capital (NYSE:AXS) and Stewart Information Services (NYSE:STC) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, dividends, valuation and analyst recommendations.

Dividends

Axis Capital pays an annual dividend of $1.76 per share and has a dividend yield of 1.8%. Stewart Information Services pays an annual dividend of $2.10 per share and has a dividend yield of 3.2%. Axis Capital pays out 14.5% of its earnings in the form of a dividend. Stewart Information Services pays out 58.5% 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. Stewart Information Services has increased its dividend for 4 consecutive years. Stewart Information Services is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

Axis Capital has a beta of 0.65, suggesting that its share price is 35% less volatile than the S&P 500. Comparatively, Stewart Information Services has a beta of 1.02, suggesting that its share price is 2% more volatile than the S&P 500.

Institutional & Insider Ownership

93.4% of Axis Capital shares are owned by institutional investors. Comparatively, 96.9% of Stewart Information Services shares are owned by institutional investors. 0.7% of Axis Capital shares are owned by company insiders. Comparatively, 1.5% of Stewart Information Services shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Axis Capital and Stewart Information Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Axis Capital	16.08%	18.99%	3.16%
Stewart Information Services	3.65%	8.57%	4.45%

Earnings and Valuation

This table compares Axis Capital and Stewart Information Services”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Axis Capital	$5.96 billion	1.30	$1.08 billion	$12.10	8.29
Stewart Information Services	$2.49 billion	0.75	$73.31 million	$3.59	18.53

Axis Capital has higher revenue and earnings than Stewart Information Services. Axis Capital is trading at a lower price-to-earnings ratio than Stewart Information Services, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings for Axis Capital and Stewart Information Services, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Axis Capital	0	3	6	2	2.91
Stewart Information Services	0	1	2	0	2.67

Axis Capital presently has a consensus price target of $121.89, indicating a potential upside of 21.58%. Stewart Information Services has a consensus price target of $81.50, indicating a potential upside of 22.54%. Given Stewart Information Services’ higher probable upside, analysts plainly believe Stewart Information Services is more favorable than Axis Capital.

Summary

Axis Capital beats Stewart Information Services on 10 of the 18 factors compared between the two stocks.

About Axis Capital

AXIS Capital Holdings Limited, through its subsidiaries, provides various specialty insurance and reinsurance products in Bermuda, the United States, and internationally. It operates through two segments, Insurance and Reinsurance. The Insurance segment offers professional insurance products that cover directors' and officers' liability, errors and omissions, employment practices, fiduciary, crime, professional indemnity, medical malpractice, and other financial insurance related coverages for commercial enterprises, financial institutions, not-for-profit organizations, and other professional service providers; and property insurance products for commercial buildings, residential premises, construction projects, property in transit, onshore renewable energy installations, and physical damage and business interruption following an act of terrorism. This segment also provides marine and aviation insurance services for offshore energy, renewable offshore energy, cargo, liability, including kidnap and ransom, fine art, specie, and hull war, hull and liability, and specific war coverage for passenger airlines, cargo operations, general aviation operations, airports, aviation authorities, security firms, and product manufacturers; personal accident, travel insurance, specialty health products for employer and affinity groups, and pet insurance products; and liability, cyber, and credit and political risk insurance services. The Reinsurance segment offers agriculture, marine and aviation, catastrophe, accidental and health, credit and surety, motor, professional, travel, life, engineering, property, and liability reinsurance products. AXIS Capital Holdings Limited was founded in 2001 and is headquartered in Pembroke, Bermuda.

About Stewart Information Services

Stewart Information Services Corporation, through its subsidiaries, provides title insurance and real estate transaction related services in the United States and internationally. The company involves in searching, examining, closing, and insuring the condition of the title to real property. It also offers home and personal insurance services; services for tax-deferred exchanges; and digital customer engagement platform services. It also provides appraisal management, online notarization and closing, credit and real estate information, and search and valuation services. The company serves homebuyers and sellers, residential and commercial real estate professionals, mortgage lenders and servicers, title agencies and real estate attorneys, and home builders through direct operations, network of independent agencies, and other businesses. The company was founded in 1893 and is headquartered in Houston, Texas.