Head to Head Review: EMC Insurance Group (EMCI) versus OneBeacon Insurance Group (OB)

EMC Insurance Group (NASDAQ: EMCI) and OneBeacon Insurance Group (NYSE:OB) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, risk, analyst recommendations, dividends, valuation, earnings and profitability.

Dividends

EMC Insurance Group pays an annual dividend of $0.88 per share and has a dividend yield of 3.1%. OneBeacon Insurance Group pays an annual dividend of $0.84 per share and has a dividend yield of 4.6%. EMC Insurance Group pays out 54.3% of its earnings in the form of a dividend. OneBeacon Insurance Group pays out 116.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares EMC Insurance Group and OneBeacon Insurance Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
EMC Insurance Group 5.32% 4.99% 1.74%
OneBeacon Insurance Group 0.10% -0.12% 0.03%

Institutional & Insider Ownership

28.3% of EMC Insurance Group shares are owned by institutional investors. Comparatively, 17.3% of OneBeacon Insurance Group shares are owned by institutional investors. 4.5% of EMC Insurance Group shares are owned by company insiders. Comparatively, 76.6% of OneBeacon Insurance Group shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares EMC Insurance Group and OneBeacon Insurance Group’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
EMC Insurance Group $640.91 million 0.94 $46.20 million $1.62 17.39
OneBeacon Insurance Group N/A N/A N/A $0.72 25.13

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

Volatility & Risk

EMC Insurance Group has a beta of 1, meaning that its stock price has a similar volatility profile to the S&P 500.Comparatively, OneBeacon Insurance Group has a beta of 0.57, meaning that its stock price is 43% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for EMC Insurance Group and OneBeacon Insurance Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
EMC Insurance Group 0 1 0 0 2.00
OneBeacon Insurance Group 0 0 0 0 N/A

EMC Insurance Group presently has a consensus target price of $32.00, suggesting a potential upside of 13.60%. Given EMC Insurance Group’s higher probable upside, research analysts clearly believe EMC Insurance Group is more favorable than OneBeacon Insurance Group.

Summary

EMC Insurance Group beats OneBeacon Insurance Group on 9 of the 12 factors compared between the two stocks.

EMC Insurance Group Company Profile

EMC Insurance Group Inc. is an insurance holding company. The Company operates through two segments: Property and Casualty Insurance and Reinsurance segment. It conducts its property and casualty insurance operations through its subsidiaries, including EMCASCO Insurance Company, Illinois EMCASCO Insurance Company and Dakota Fire Insurance Company, and its reinsurance operations through its subsidiary, EMC Reinsurance Company. The Company focuses on the sale of commercial lines of property and casualty insurance to small and medium-sized businesses. The Company offered its insurance products in 41 states, as of December 31, 2016. The Company is owned by Employers Mutual Casualty Company (Employers Mutual), a multiple-line property and casualty insurance company. The Company’s insurance agency, EMC Underwriters, LLC (EMC Underwriters), specializes in marketing excess and surplus lines of insurance.

OneBeacon Insurance Group Company Profile

OneBeacon Insurance Group, Ltd. (OneBeacon) is a specialty property and casualty insurance writer that offers a range of insurance products in the United States. The Company’s segments include Specialty Products, Specialty Industries, and Investing, Financing and Corporate. As of December 31, 2016, the Specialty Products segment consisted of 10 underwriting operating segments representing an aggregation based on those that offer products, coverages and services to customers across the United States. As of December 31, 2016, the Specialty Industries segment consisted of six underwriting operating segments representing an aggregation based on those that focus on solving the needs of a particular customer or industry group. The Investing, Financing and Corporate segment includes the investing and financing activities for OneBeacon on a consolidated basis, and certain other activities conducted through the Company and its intermediate subsidiaries.

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