National Interstate (NATL) and HCI Group (HCI) Head-To-Head Review

National Interstate (NASDAQ: NATL) and HCI Group (NYSE:HCI) are both financials companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, dividends, institutional ownership, risk, valuation, earnings and analyst recommendations.

Dividends

National Interstate pays an annual dividend of $0.56 per share. HCI Group pays an annual dividend of $1.40 per share and has a dividend yield of 3.9%. National Interstate pays out 40.6% of its earnings in the form of a dividend. HCI Group pays out -74.1% 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. National Interstate has raised its dividend for 4 consecutive years. HCI Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings & Valuation

This table compares National Interstate and HCI Group’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
National Interstate N/A N/A N/A $1.38 N/A
HCI Group $264.45 million 1.32 $29.02 million ($1.89) -18.92

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

Profitability

This table compares National Interstate and HCI Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
National Interstate 5.91% 10.13% 1.94%
HCI Group -84.53% -70.29% -17.85%

Institutional & Insider Ownership

84.9% of National Interstate shares are owned by institutional investors. Comparatively, 70.9% of HCI Group shares are owned by institutional investors. 11.8% of National Interstate shares are owned by company insiders. Comparatively, 20.4% of HCI Group shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings and target prices for National Interstate and HCI Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
National Interstate 0 0 0 0 N/A
HCI Group 0 1 2 0 2.67

HCI Group has a consensus target price of $43.33, suggesting a potential upside of 21.18%.

Summary

National Interstate beats HCI Group on 7 of the 12 factors compared between the two stocks.

About National Interstate

National Interstate Corporation and its subsidiaries operate as an insurance holding company that underwrites and sells traditional and alternative property and casualty insurance products to the passenger transportation, trucking and moving and storage industries, general commercial insurance to small businesses in Hawaii and Alaska and personal insurance to owners of recreational vehicles throughout the United States. The Company is a specialty property and casualty insurance company with a focus on the transportation industry. The Company operates through property and casualty insurance segment. The Company offers approximately 40 product lines in the specialty property and casualty insurance market, which it groups into approximately four general business components: alternative risk transfer (ART), transportation, specialty personal lines, and Hawaii and Alaska based on the class of business, insureds’ risk participation or geographic location.

About HCI Group

HCI Group, Inc. (HCI) is an insurance holding company. The Company operates through four operating divisions: property and casualty insurance, reinsurance, investment real estate and information technology. Its operations include Insurance Operations and Other Operations. Its Insurance Operations include property and casualty insurance, and reinsurance. The Company, through its subsidiary, Homeowners Choice Property & Casualty Insurance Company, Inc. (HCPCI), provides property and casualty insurance to homeowners, condominium owners and tenants on properties located in Florida. HCPCI also offers flood-endorsed and wind-only policies to new and pre-existing Florida customers. Its Other Operations include information technology (IT) and real estate. The Company’s real estate operations consist of multiple properties it owns and operates.

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