Contrasting United Insurance (UIHC) & Allied World Assurance (AWHHF)

Allied World Assurance (OTCMKTS: AWHHF) and United Insurance (NASDAQ:UIHC) are both companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, dividends, profitability and risk.

Institutional & Insider Ownership

86.5% of Allied World Assurance shares are owned by institutional investors. Comparatively, 31.6% of United Insurance shares are owned by institutional investors. 3.2% of Allied World Assurance shares are owned by insiders. Comparatively, 22.6% of United Insurance shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Allied World Assurance and United Insurance’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Allied World Assurance 12.56% 8.96% 2.42%
United Insurance -4.54% -2.29% -0.58%

Valuation and Earnings

This table compares Allied World Assurance and United Insurance’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Allied World Assurance N/A N/A N/A $2.97 17.36
United Insurance $487.12 million 1.45 $5.69 million ($0.80) -20.70

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

Dividends

Allied World Assurance pays an annual dividend of $0.52 per share and has a dividend yield of 1.0%. United Insurance pays an annual dividend of $0.24 per share and has a dividend yield of 1.4%. Allied World Assurance pays out 17.5% of its earnings in the form of a dividend. United Insurance pays out -30.0% 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. United Insurance is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility and Risk

Allied World Assurance has a beta of 0.7, meaning that its stock price is 30% less volatile than the S&P 500. Comparatively, United Insurance has a beta of 1.53, meaning that its stock price is 53% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Allied World Assurance and United Insurance, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Allied World Assurance 0 4 0 0 2.00
United Insurance 0 1 2 1 3.00

Allied World Assurance currently has a consensus target price of $39.25, indicating a potential downside of 23.86%. United Insurance has a consensus target price of $18.00, indicating a potential upside of 8.70%. Given United Insurance’s stronger consensus rating and higher possible upside, analysts plainly believe United Insurance is more favorable than Allied World Assurance.

Summary

United Insurance beats Allied World Assurance on 9 of the 14 factors compared between the two stocks.

Allied World Assurance Company Profile

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.

United Insurance Company Profile

United Insurance Holdings Corp. is a property and casualty insurance holding company that sources, writes and services residential property and casualty insurance policies using a network of agents and a group of insurance subsidiaries. The Company’s insurance subsidiary is United Property & Casualty Insurance Company. Its other subsidiaries include United Insurance Management, L.C., the managing general agent that manages substantially all aspects of United Property & Casualty Insurance Company’s business; Skyway Claims Services, LLC, which provides services to its insurance affiliate; UPC Re, which provides a portion of the reinsurance protection purchased by its insurance affiliate. The Company’s principal product is homeowners’ insurance, which it offers in Connecticut, Florida, Georgia, Hawaii, Louisiana, Massachusetts, New Jersey, North Carolina, Rhode Island, South Carolina and Texas.

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