Financial Analysis: NMI (NASDAQ:NMIH) vs. American Overseas Group (NASDAQ:AOREF)

NMI (NASDAQ:NMIH) and American Overseas Group (OTCMKTS:AOREF) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, institutional ownership, valuation, analyst recommendations, risk, profitability and earnings.

Institutional & Insider Ownership

89.8% of NMI shares are held by institutional investors. 3.8% of NMI shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares NMI and American Overseas Group’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
NMI $378.77 million 4.21 $171.96 million $2.62 7.18
American Overseas Group $15.01 million 1.08 -$3.18 million N/A N/A

NMI has higher revenue and earnings than American Overseas Group.

Profitability

This table compares NMI and American Overseas Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NMI 43.85% 18.33% 12.13%
American Overseas Group N/A N/A N/A

Volatility and Risk

NMI has a beta of 1.95, meaning that its share price is 95% more volatile than the S&P 500. Comparatively, American Overseas Group has a beta of -0.32, meaning that its share price is 132% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for NMI and American Overseas Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NMI 0 2 10 0 2.83
American Overseas Group 0 0 0 0 N/A

NMI presently has a consensus price target of $25.00, suggesting a potential upside of 32.91%. Given NMI’s higher possible upside, equities research analysts clearly believe NMI is more favorable than American Overseas Group.

Summary

NMI beats American Overseas Group on 11 of the 11 factors compared between the two stocks.

About NMI

NMI Holdings, Inc., through its subsidiaries, provides private mortgage guaranty insurance services in the United States. The company offers mortgage insurance; reinsurance on loans; and outsourced loan review services to mortgage loan originators. It serves national and regional mortgage banks, money center banks, credit unions, community banks, builder-owned mortgage lenders, Internet-sourced lenders, and other non-bank lenders. The company was founded in 2011 and is headquartered in Emeryville, California.

About American Overseas Group

American Overseas Group Limited, through its subsidiaries, provides property/casualty insurance and reinsurance products and services in Bermuda, Barbados, and the United States. It offers non-standard auto insurance products; and specialty risk transfer and management services. The company was formerly known as RAM Holdings Ltd. and changed its name to American Overseas Group Limited in December 2011. American Overseas Group Limited was founded in 1998 and is based in Hamilton, Bermuda.

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