Hanover Insurance Group (THG) vs. Federated National Holding Co Common Stock (FNHC) Head to Head Analysis

Hanover Insurance Group (NYSE: THG) and Federated National Holding Co Common Stock (NASDAQ:FNHC) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, valuation, analyst recommendations, risk, dividends, profitability and institutional ownership.

Insider & Institutional Ownership

86.3% of Hanover Insurance Group shares are owned by institutional investors. Comparatively, 57.8% of Federated National Holding Co Common Stock shares are owned by institutional investors. 1.3% of Hanover Insurance Group shares are owned by company insiders. Comparatively, 10.8% of Federated National Holding Co Common Stock shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current recommendations for Hanover Insurance Group and Federated National Holding Co Common Stock, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hanover Insurance Group 0 0 1 0 3.00
Federated National Holding Co Common Stock 0 0 1 1 3.50

Hanover Insurance Group currently has a consensus price target of $91.00, indicating a potential downside of 23.89%. Federated National Holding Co Common Stock has a consensus price target of $22.00, indicating a potential downside of 4.64%. Given Federated National Holding Co Common Stock’s stronger consensus rating and higher possible upside, analysts plainly believe Federated National Holding Co Common Stock is more favorable than Hanover Insurance Group.

Risk & Volatility

Hanover Insurance Group has a beta of 0.98, suggesting that its stock price is 2% less volatile than the S&P 500. Comparatively, Federated National Holding Co Common Stock has a beta of 1.06, suggesting that its stock price is 6% more volatile than the S&P 500.

Profitability

This table compares Hanover Insurance Group and Federated National Holding Co Common Stock’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hanover Insurance Group 3.97% 8.33% 1.62%
Federated National Holding Co Common Stock 3.40% 6.19% 1.49%

Dividends

Hanover Insurance Group pays an annual dividend of $2.16 per share and has a dividend yield of 1.8%. Federated National Holding Co Common Stock pays an annual dividend of $0.32 per share and has a dividend yield of 1.4%. Hanover Insurance Group pays out 45.6% of its earnings in the form of a dividend. Federated National Holding Co Common Stock pays out 53.3% 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. Hanover Insurance Group has raised its dividend for 6 consecutive years. Hanover Insurance Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares Hanover Insurance Group and Federated National Holding Co Common Stock’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hanover Insurance Group $5.18 billion 0.98 $186.20 million $4.74 25.22
Federated National Holding Co Common Stock $391.66 million 0.77 $7.98 million $0.60 38.45

Hanover Insurance Group has higher revenue and earnings than Federated National Holding Co Common Stock. Hanover Insurance Group is trading at a lower price-to-earnings ratio than Federated National Holding Co Common Stock, indicating that it is currently the more affordable of the two stocks.

Summary

Hanover Insurance Group beats Federated National Holding Co Common Stock on 11 of the 17 factors compared between the two stocks.

Hanover Insurance Group Company Profile

The Hanover Insurance Group, Inc., through its subsidiaries, provides various property and casualty insurance products and services in the United States and internationally. It operates through four segments: Commercial Lines, Personal Lines, Chaucer, and Other. The Commercial Lines segment offers commercial multiple peril, commercial automobile, workers' compensation, and other commercial coverages, such as inland marine, specialty program business, management and professional liability, surety, and specialty property, as well as monoline general liability, umbrella, healthcare, and miscellaneous commercial property insurance products. The Personal Lines segment provides personal automobile and homeowners coverages, as well as other personal coverages, including personal inland marine, umbrella, fire, personal watercraft, earthquake, and other miscellaneous coverages. The Chaucer segment offers marine, aviation, and political insurance; casualty comprising international liability, specialist coverages, and run-off syndicate participations; and energy, property, and assumed reinsurance treaty insurance services. The Other segment markets investment management and advisory services to institutions, pension funds, and other organizations. The company markets its products and services through a network of independent agents and brokers. The Hanover Insurance Group, Inc. was founded in 1852 and is headquartered in Worcester, Massachusetts.

Federated National Holding Co Common Stock Company Profile

Federated National Holding Company, through its subsidiaries, engages in insurance underwriting, distribution, and claims processing business in the United States. The company underwrites homeowner's multi-peril, personal automobile, commercial general liability, federal flood, and other lines of insurance. It markets and distributes its own and third-party insurers' products, and other services through a network of independent and general agents. The company was formerly known as 21st Century Holding Company and changed its name to Federated National Holding Company in September 2012. Federated National Holding Company was founded in 1991 and is based in Sunrise, Florida.

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