Comparing Hallmark Financial Services (NASDAQ:HALL) & Markel (MKL)

Hallmark Financial Services (NASDAQ: HALL) and Markel (NYSE:MKL) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, valuation, risk, earnings and profitability.

Risk & Volatility

Hallmark Financial Services has a beta of 0.84, meaning that its share price is 16% less volatile than the S&P 500. Comparatively, Markel has a beta of 0.95, meaning that its share price is 5% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and recommmendations for Hallmark Financial Services and Markel, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hallmark Financial Services 0 1 0 0 2.00
Markel 0 2 1 0 2.33

Markel has a consensus target price of $1,066.67, indicating a potential downside of 4.54%. Given Markel’s stronger consensus rating and higher possible upside, analysts clearly believe Markel is more favorable than Hallmark Financial Services.

Earnings and Valuation

This table compares Hallmark Financial Services and Markel’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hallmark Financial Services $375.95 million 0.48 $6.52 million ($0.26) -38.11
Markel $5.61 billion 2.77 $455.68 million $4.50 248.30

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

Institutional & Insider Ownership

65.0% of Hallmark Financial Services shares are owned by institutional investors. Comparatively, 76.8% of Markel shares are owned by institutional investors. 28.7% of Hallmark Financial Services shares are owned by insiders. Comparatively, 2.5% of Markel shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Hallmark Financial Services and Markel’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hallmark Financial Services -1.19% -0.42% -0.09%
Markel 1.60% 0.83% 0.27%

Summary

Markel beats Hallmark Financial Services on 12 of the 13 factors compared between the two stocks.

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.

About Markel

Markel Corporation is a financial holding company serving a range of markets. The Company’s principal business markets and underwrites specialty insurance products. It monitors and reports its ongoing underwriting operations in three segments: U.S. Insurance, International Insurance and Reinsurance. The Company, through its subsidiary Markel Ventures, Inc. (Markel Ventures), owns interests in various industrial and service businesses that operate outside of the specialty insurance marketplace. The U.S. Insurance segment includes all direct business and facultative placements written by its insurance subsidiaries domiciled in the United States. The International Insurance segment includes all direct business and facultative placements written by its insurance subsidiaries domiciled outside of the United States, including its syndicate at Lloyd’s of London (Lloyd’s). The Reinsurance segment includes all treaty reinsurance written across the Company.

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