Selective Insurance Group (SIGI) & Alterra Capital (NASDAQ:ALTE) Financial Survey

Selective Insurance Group (NASDAQ: SIGI) and Alterra Capital (NASDAQ:ALTE) are both mid-cap financials companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, earnings, analyst recommendations, institutional ownership, dividends, valuation and risk.

Valuation and Earnings

This table compares Selective Insurance Group and Alterra Capital’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Selective Insurance Group $2.28 billion 1.51 $158.49 million $3.01 19.60
Alterra Capital N/A N/A N/A $1.65 19.73

Selective Insurance Group has higher revenue and earnings than Alterra Capital. Selective Insurance Group is trading at a lower price-to-earnings ratio than Alterra Capital, indicating that it is currently the more affordable of the two stocks.

Dividends

Selective Insurance Group pays an annual dividend of $0.72 per share and has a dividend yield of 1.2%. Alterra Capital does not pay a dividend. Selective Insurance Group pays out 23.9% of its earnings in the form of a dividend.

Institutional & Insider Ownership

77.8% of Selective Insurance Group shares are owned by institutional investors. 3.0% of Selective Insurance Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and target prices for Selective Insurance Group and Alterra Capital, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Selective Insurance Group 0 4 0 0 2.00
Alterra Capital 0 0 0 0 N/A

Selective Insurance Group currently has a consensus target price of $50.91, suggesting a potential downside of 13.71%. Given Selective Insurance Group’s higher probable upside, equities research analysts plainly believe Selective Insurance Group is more favorable than Alterra Capital.

Profitability

This table compares Selective Insurance Group and Alterra Capital’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Selective Insurance Group 7.36% 11.00% 2.37%
Alterra Capital N/A N/A N/A

Summary

Selective Insurance Group beats Alterra Capital on 9 of the 11 factors compared between the two stocks.

Selective Insurance Group Company Profile

Selective Insurance Group, Inc. is a holding company. As of December 31, 2016, the Company had 10 insurance subsidiaries, nine of which were licensed by various state departments of insurance to write specific lines of property and casualty insurance business. The remaining subsidiary is authorized by various state insurance departments to write property and casualty insurance in the excess and surplus lines (E&S) market. Its segments include Standard Commercial Lines, which consists of insurance products and services provided in the standard marketplace; Standard Personal Lines, which consists of insurance products and services, including flood insurance coverage that it writes through the National Flood Insurance Program (NFIP); E&S Lines, which consists of insurance products and services provided to customers not obtaining coverage in the standard marketplace, and investment segment invests insurance premiums, as well as amounts generated through its capital management strategies.

Alterra Capital Company Profile

Alterra Capital Holdings Limited (Alterra) is engaged in providing diversified specialty insurance and reinsurance products to corporations, public entities and property and casualty insurers. In Bermuda, the Company conducts its insurance and reinsurance operations through Alterra Bermuda. In Europe, the Company conducts its non-Lloyd’s operations primarily from Dublin, Ireland through Alterra Europe. In the United States, the Company’s U.S. reinsurance operations are conducted through Alterra Re USA, a Connecticut-domiciled reinsurance company. The Company’s U.S. insurance operations are conducted through Alterra E&S. In Latin America, the Company provides reinsurance to clients through Alterra at Lloyd’s in Rio de Janeiro, Brazil, using Lloyd’s admitted status, through Alterra Europe. In June 2012, the Company formed New Point V Limited. On May 1, 2013, Alterra Capital was acquired by Markel Corporation.

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