Financial Survey: Old Republic International (ORI) versus Hallmark Financial Services (HALL)

Old Republic International (NYSE: ORI) and Hallmark Financial Services (NASDAQ:HALL) are both financials companies, but which is the better business? We will compare the two companies based on the strength of their profitability, analyst recommendations, dividends, earnings, risk, valuation and institutional ownership.

Profitability

This table compares Old Republic International and Hallmark Financial Services’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Old Republic International 6.45% 7.50% 1.81%
Hallmark Financial Services -1.19% -0.42% -0.09%

Analyst Ratings

This is a summary of current ratings and recommmendations for Old Republic International and Hallmark Financial Services, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Old Republic International 0 0 0 1 4.00
Hallmark Financial Services 0 1 0 0 2.00

Old Republic International currently has a consensus target price of $25.00, suggesting a potential upside of 26.52%. Given Old Republic International’s stronger consensus rating and higher probable upside, equities analysts plainly believe Old Republic International is more favorable than Hallmark Financial Services.

Earnings and Valuation

This table compares Old Republic International and Hallmark Financial Services’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Old Republic International $5.90 billion 0.88 $467.00 million $1.35 14.64
Hallmark Financial Services $375.95 million 0.51 $6.52 million ($0.25) -42.44

Old Republic International has higher revenue and earnings than Hallmark Financial Services. Hallmark Financial Services is trading at a lower price-to-earnings ratio than Old Republic International, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

70.6% of Old Republic International shares are owned by institutional investors. Comparatively, 65.0% of Hallmark Financial Services shares are owned by institutional investors. 2.0% of Old Republic International shares are owned by insiders. Comparatively, 28.7% of Hallmark Financial Services shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Risk and Volatility

Old Republic International has a beta of 1.36, indicating that its stock price is 36% more volatile than the S&P 500. Comparatively, Hallmark Financial Services has a beta of 0.84, indicating that its stock price is 16% less volatile than the S&P 500.

Dividends

Old Republic International pays an annual dividend of $0.76 per share and has a dividend yield of 3.8%. Hallmark Financial Services does not pay a dividend. Old Republic International pays out 56.3% of its earnings in the form of a dividend. Hallmark Financial Services has raised its dividend for 36 consecutive years.

Summary

Old Republic International beats Hallmark Financial Services on 14 of the 17 factors compared between the two stocks.

About Old Republic International

Old Republic International Corporation is a holding company. The Company is engaged in business of insurance underwriting and related services. The Company conducts its operations through various regulated insurance company subsidiaries, which are organized into three segments: General Insurance Group, Title Insurance Group and the Republic Financial Indemnity Group (RFIG) Run-off Business. The Company’s General Insurance segment consists of property and liability insurance, and offers coverages to businesses, government and other institutions. The Company’s Title Insurance Group business consists of the issuance of policies to real estate purchasers and investors based upon searches of the public records, which contain information concerning interests in real property. The Company’s RFIG run-off business consists of its mortgage guaranty and consumer credit indemnity (CCI) operations.

About Hallmark Financial Services

Hallmark Financial Services, Inc. is an insurance holding company. The Company markets, distributes, underwrites and services its property/casualty insurance products to businesses and individuals. Its business involves marketing, distributing, underwriting and servicing insurance products, as well as providing other insurance related services. Its segments include Standard Commercial Segment, Specialty Commercial Segment and Personal Segment. The Company’s Standard Commercial P&C operating unit primarily underwrites low-severity, short-tailed commercial property/casualty insurance products in the standard market. The Company reinsures a portion of the risk it underwrites in order to control the exposure to losses and to protect capital resources. Its Workers Compensation operating unit specializes in small and middle market workers compensation business. Its Specialty Commercial operating unit offers general aviation and satellite launch insurance products and services.

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