Financial Analysis: Global Indemnity Group (NASDAQ:GBLI) versus Travelers Companies (NYSE:TRV)

Travelers Companies (NYSE:TRV) and Global Indemnity Group (NASDAQ:GBLI) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, profitability, risk, analyst recommendations, institutional ownership, dividends and earnings.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Travelers Companies and Global Indemnity Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Travelers Companies	4	15	5	2	2.19
Global Indemnity Group	0	1	0	0	2.00

Travelers Companies presently has a consensus target price of $370.83, indicating a potential downside of 6.76%. Given Travelers Companies’ stronger consensus rating and higher probable upside, research analysts plainly believe Travelers Companies is more favorable than Global Indemnity Group.

Dividends

Travelers Companies pays an annual dividend of $5.00 per share and has a dividend yield of 1.3%. Global Indemnity Group pays an annual dividend of $1.40 per share and has a dividend yield of 6.4%. Travelers Companies pays out 13.1% of its earnings in the form of a dividend. Global Indemnity Group pays out 66.7% 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. Travelers Companies has increased its dividend for 21 consecutive years and Global Indemnity Group has increased its dividend for 1 consecutive years.

Institutional & Insider Ownership

82.5% of Travelers Companies shares are owned by institutional investors. Comparatively, 37.4% of Global Indemnity Group shares are owned by institutional investors. 1.4% of Travelers Companies shares are owned by company insiders. Comparatively, 47.1% of Global Indemnity Group shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Travelers Companies and Global Indemnity Group”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Travelers Companies	$48.83 billion	1.67	$6.29 billion	$38.14	10.43
Global Indemnity Group	$450.10 million	0.72	$25.33 million	$2.10	10.50

Travelers Companies has higher revenue and earnings than Global Indemnity Group. Travelers Companies is trading at a lower price-to-earnings ratio than Global Indemnity Group, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Travelers Companies has a beta of 0.4, indicating that its share price is 60% less volatile than the S&P 500. Comparatively, Global Indemnity Group has a beta of 0.52, indicating that its share price is 48% less volatile than the S&P 500.

Profitability

This table compares Travelers Companies and Global Indemnity Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Travelers Companies	17.03%	26.19%	5.82%
Global Indemnity Group	6.74%	4.69%	1.93%

Summary

Travelers Companies beats Global Indemnity Group on 15 of the 18 factors compared between the two stocks.

About Travelers Companies

The Travelers Companies, Inc., through its subsidiaries, provides a range of commercial and personal property, and casualty insurance products and services to businesses, government units, associations, and individuals in the United States and internationally. The company operates through three segments: Business Insurance, Bond & Specialty Insurance, and Personal Insurance. The Business Insurance segment offers workers’ compensation, commercial automobile and property, general liability, commercial multi-peril, employers’ liability, public and product liability, professional indemnity, marine, aviation, onshore and offshore energy, construction, terrorism, personal accident, and kidnap and ransom insurance products. This segment operates through select accounts, which serve small businesses; commercial accounts that serve mid-sized businesses; national accounts, which serve large companies; and national property and other that serve large and mid-sized customers, commercial trucking industry, and agricultural businesses, as well as markets and distributes its products through brokers, wholesale agents, and program managers. The Bond & Specialty Insurance segment provides surety, fidelity, management and professional liability, and other property and casualty coverages and related risk management services through independent agencies and brokers. The Personal Insurance segment offers property and casualty insurance covering personal risks, primarily automobile and homeowners’ insurance to individuals through independent agencies and brokers. The Travelers Companies, Inc. was founded in 1853 and is based in New York, New York.

About Global Indemnity Group

Global Indemnity Group, LLC, through its subsidiaries, provides specialty property and casualty insurance, and reinsurance products worldwide. It operates in two segments, Penn-America and Non-Core Operations. The company distributes property and general liability products for small commercial businesses through a network of wholesale general agents; and property and general liability niche products through program administrators with specific binding authority. It also provides third-party treaty reinsurance for casualty insurance and reinsurance companies through brokers/intermediaries. In addition, the company offers property and general liability products distributed using company administered systems, and includes collectibles, digital direct-to-consumer insurance coverage for owners of collections; and VacantExpress, insurance coverage for owners of properties under construction, renovation, vacant, or rented, distributed through wholesale general agents and retail agents. Global Indemnity Group, LLC was founded in 2003 and is headquartered in Bala Cynwyd, Pennsylvania.