State National Companies (SNC) versus OneBeacon Insurance Group (OB) Critical Review

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

Earnings & Valuation

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This table compares State National Companies and OneBeacon Insurance Group’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
State National Companies $217.07 million 4.08 $49.07 million N/A N/A
OneBeacon Insurance Group N/A N/A N/A N/A N/A

State National Companies has higher revenue and earnings than OneBeacon Insurance Group.

Profitability

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

Net Margins Return on Equity Return on Assets
State National Companies 23.91% 18.02% 1.72%
OneBeacon Insurance Group 0.10% -0.12% 0.03%

Analyst Recommendations

This is a breakdown of current ratings and target prices for State National Companies and OneBeacon Insurance Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
State National Companies 1 2 4 0 2.43
OneBeacon Insurance Group 0 0 0 0 N/A

State National Companies currently has a consensus target price of $59.50, indicating a potential upside of 183.06%. Given State National Companies’ higher possible upside, equities research analysts plainly believe State National Companies is more favorable than OneBeacon Insurance Group.

Insider & Institutional Ownership

58.6% of State National Companies shares are owned by institutional investors. Comparatively, 17.3% of OneBeacon Insurance Group shares are owned by institutional investors. 34.8% of State National Companies shares are owned by insiders. Comparatively, 76.6% of OneBeacon Insurance Group shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Dividends

State National Companies pays an annual dividend of $0.24 per share and has a dividend yield of 1.1%. OneBeacon Insurance Group pays an annual dividend of $0.84 per share and has a dividend yield of 4.6%.

Summary

State National Companies beats OneBeacon Insurance Group on 7 of the 9 factors compared between the two stocks.

About State National Companies

State National Companies, Inc. is a specialty provider of property and casualty insurance. The Company’s segments include Program Services, Lender Services and Corporate. In the Program Services segment, the Company operates an issuing carrier (fronting) business to provide insurance capacity access to the United States property and casualty insurance markets. In the Lender Services segment, the Company specializes in providing collateral protection insurance, which insures automobiles held as collateral for loans made by financial institutions. The Company writes its insurance business through its insurance company subsidiaries, which include State National Insurance Company, Inc. (SNIC), National Specialty Insurance Company (NSIC) and United Specialty Insurance Company (USIC). As of December 31, 2016, SNIC and NSIC were admitted carriers licensed to write property and casualty business in all 50 states and the District of Columbia. USIC is an admitted carrier in Delaware.

About OneBeacon Insurance Group

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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