Comparing Maiden (NASDAQ:MHLD) and Erie Indemnity (ERIE)

Maiden (NASDAQ: MHLD) and Erie Indemnity (NASDAQ:ERIE) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, risk, valuation, dividends and analyst recommendations.

Earnings and Valuation

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This table compares Maiden and Erie Indemnity’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Maiden $2.92 billion 0.19 -$169.89 million ($2.16) -3.17
Erie Indemnity $1.69 billion 3.12 $196.99 million $3.95 28.96

Erie Indemnity has lower revenue, but higher earnings than Maiden. Maiden is trading at a lower price-to-earnings ratio than Erie Indemnity, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Maiden and Erie Indemnity’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Maiden -5.82% -16.99% -2.42%
Erie Indemnity 11.65% 24.25% 13.04%

Analyst Ratings

This is a breakdown of recent ratings and price targets for Maiden and Erie Indemnity, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Maiden 0 3 1 0 2.25
Erie Indemnity 0 0 0 0 N/A

Maiden currently has a consensus target price of $10.40, indicating a potential upside of 51.82%. Given Maiden’s higher probable upside, equities research analysts clearly believe Maiden is more favorable than Erie Indemnity.

Volatility and Risk

Maiden has a beta of 1.1, meaning that its stock price is 10% more volatile than the S&P 500. Comparatively, Erie Indemnity has a beta of 0.42, meaning that its stock price is 58% less volatile than the S&P 500.

Insider and Institutional Ownership

66.2% of Maiden shares are held by institutional investors. Comparatively, 31.0% of Erie Indemnity shares are held by institutional investors. 10.0% of Maiden shares are held by company insiders. Comparatively, 46.8% of Erie Indemnity shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Dividends

Maiden pays an annual dividend of $0.60 per share and has a dividend yield of 8.8%. Erie Indemnity pays an annual dividend of $3.36 per share and has a dividend yield of 2.9%. Maiden pays out -27.8% of its earnings in the form of a dividend. Erie Indemnity pays out 85.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Erie Indemnity has raised its dividend for 22 consecutive years. Maiden is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Erie Indemnity beats Maiden on 9 of the 16 factors compared between the two stocks.

About Maiden

Maiden Holdings, Ltd., through its subsidiaries, provides reinsurance solutions to regional and specialty insurers in the United States, Europe, and internationally. It operates in two segments, Diversified Reinsurance and AmTrust Reinsurance. The Diversified Reinsurance segment offers property and casualty reinsurance, including the writing of treaties on a quota share or excess of loss basis; and facultative risks, which are marketed through third-party intermediaries and on a direct basis. The AmTrust Reinsurance segment provides small commercial business insurance, including workers' compensation, commercial package, and other property and casualty insurance products; and specialty risk and extended warranty coverage for consumer and commercial goods, as well as custom designed coverages, such as accidental damage plans and payment protection plans related to the sale of consumer and commercial goods. This segment also offers specialty program comprising package products, general liability, commercial auto liability, excess and surplus lines programs, and other specialty commercial property and casualty insurance to small and middle market companies. In addition, the company offers auto and credit life insurance products through its insurer partners to retail clients. Maiden Holdings, Ltd. was founded in 2007 and is headquartered in Pembroke, Bermuda.

About Erie Indemnity

Erie Indemnity Company operates as a managing attorney-in-fact for the subscribers at the Erie Insurance Exchange in the United States. The company provides sales, underwriting, and policy issuance services for the policyholders on behalf of the Erie Insurance Exchange. Its sales related services include agent compensation, and sales and advertising support services; and underwriting services comprise underwriting and policy processing, as well as provides administrative support, information technology, and customer services. The company operates three field offices. Erie Indemnity Company was founded in 1925 and is based in Erie, Pennsylvania.

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