Comparing Allied World Assurance Company Hldgs (AWH) & Employers Holdings (EIG)

Allied World Assurance Company Hldgs (NYSE: AWH) and Employers Holdings (NYSE:EIG) are both financials companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, analyst recommendations, risk, institutional ownership, profitability and earnings.

Profitability

This table compares Allied World Assurance Company Hldgs and Employers Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Allied World Assurance Company Hldgs 12.56% 8.96% 2.42%
Employers Holdings 13.32% 10.39% 2.40%

Insider & Institutional Ownership

86.5% of Allied World Assurance Company Hldgs shares are owned by institutional investors. Comparatively, 77.5% of Employers Holdings shares are owned by institutional investors. 3.2% of Allied World Assurance Company Hldgs shares are owned by insiders. Comparatively, 4.0% of Employers Holdings shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Allied World Assurance Company Hldgs and Employers Holdings’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Allied World Assurance Company Hldgs N/A N/A N/A $2.97 16.58
Employers Holdings $779.80 million 1.99 $106.70 million $3.19 15.02

Employers Holdings has higher revenue and earnings than Allied World Assurance Company Hldgs. Employers Holdings is trading at a lower price-to-earnings ratio than Allied World Assurance Company Hldgs, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Allied World Assurance Company Hldgs has a beta of 0.7, indicating that its share price is 30% less volatile than the S&P 500. Comparatively, Employers Holdings has a beta of 1.13, indicating that its share price is 13% more volatile than the S&P 500.

Dividends

Allied World Assurance Company Hldgs pays an annual dividend of $0.52 per share and has a dividend yield of 1.1%. Employers Holdings pays an annual dividend of $0.60 per share and has a dividend yield of 1.3%. Allied World Assurance Company Hldgs pays out 17.5% of its earnings in the form of a dividend. Employers Holdings pays out 18.8% 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. Employers Holdings has increased its dividend for 3 consecutive years. Employers Holdings is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of recent ratings for Allied World Assurance Company Hldgs and Employers Holdings, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Allied World Assurance Company Hldgs 0 5 0 0 2.00
Employers Holdings 1 1 1 0 2.00

Allied World Assurance Company Hldgs currently has a consensus target price of $39.25, indicating a potential downside of 20.29%. Employers Holdings has a consensus target price of $44.50, indicating a potential downside of 7.10%. Given Employers Holdings’ higher possible upside, analysts clearly believe Employers Holdings is more favorable than Allied World Assurance Company Hldgs.

Summary

Employers Holdings beats Allied World Assurance Company Hldgs on 10 of the 13 factors compared between the two stocks.

About Allied World Assurance Company Hldgs

Allied World Assurance Company Holdings Ltd is a Germany-based holding company. It provides property, casualty and specialty insurance and reinsurance solutions to clients around the world. The Company operates in three segments: North American Insurance, Global Markets Insurance and Reinsurance. The North American Insurance segment consists of the Company’s direct insurance operations in the United States, Bermuda and Canada. The Global Markets Insurance segment includes all of the Company’s direct insurance operations outside of North America. The Company’s reinsurance segment includes the reinsurance of property, general casualty, professional liability, specialty lines and property catastrophe coverage’s written by other reinsurance companies. The Company leases space in Australia, Bermuda, Canada, Hong Kong, Ireland, Labuan, Singapore, the United Kingdom and the United States for the operation of its North American Insurance, Global Markets Insurance and Reinsurance segments.

About Employers Holdings

Employers Holdings, Inc. is a holding company. Through its insurance subsidiaries, the Company provides workers’ compensation insurance coverage to select, small businesses in low to medium hazard industries. It provides workers’ compensation insurance under a statutory system wherein employers are required to provide coverage for their employees’ medical, disability, vocational rehabilitation, and/or death benefit costs for work-related injuries or illnesses. As of December 31, 2016 the Company provided workers’ compensation insurance in 36 states and the District of Columbia, with a concentration in California. Its insurance subsidiaries include Employers Insurance Company of Nevada (EICN), Employers Compensation Insurance Company (ECIC), Employers Preferred Insurance Company (EPIC) and Employers Assurance Company (EAC). The Company’s insurance products are jointly offered and marketed with and through its partners and alliances.

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