Federated National (NASDAQ: FNHC) and Alleghany (NYSE:Y) are both financials companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, valuation, analyst recommendations, profitability, earnings, dividends and risk.

Analyst Recommendations

This is a summary of current ratings for Federated National and Alleghany, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Federated National 0 0 1 0 3.00
Alleghany 0 1 1 0 2.50

Federated National currently has a consensus price target of $22.00, suggesting a potential upside of 35.80%. Alleghany has a consensus price target of $625.00, suggesting a potential upside of 5.84%. Given Federated National’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Federated National is more favorable than Alleghany.

Valuation & Earnings

This table compares Federated National and Alleghany’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Federated National $316.38 million 0.67 -$190,000.00 ($0.70) -23.14
Alleghany $6.13 billion 1.48 $456.92 million $0.41 1,440.27

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

Risk & Volatility

Federated National has a beta of 1.53, suggesting that its share price is 53% more volatile than the S&P 500. Comparatively, Alleghany has a beta of 0.96, suggesting that its share price is 4% less volatile than the S&P 500.

Insider & Institutional Ownership

62.3% of Federated National shares are owned by institutional investors. Comparatively, 82.2% of Alleghany shares are owned by institutional investors. 10.8% of Federated National shares are owned by insiders. Comparatively, 4.0% of Alleghany shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Federated National and Alleghany’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Federated National -2.54% -4.03% -1.06%
Alleghany 0.10% -0.14% -0.05%

Dividends

Federated National pays an annual dividend of $0.32 per share and has a dividend yield of 2.0%. Alleghany does not pay a dividend. Federated National pays out -45.7% of its earnings in the form of a dividend.

Summary

Alleghany beats Federated National on 9 of the 15 factors compared between the two stocks.

Federated National Company Profile

Federated National Holding Company (FNHC) is an insurance holding company that controls all steps in the insurance underwriting, distribution and claims processes through its subsidiaries and its contractual relationships with its independent agents and general agents. The Company is authorized to underwrite homeowners’ multi-peril (homeowners), commercial general liability, federal flood, personal auto and various other lines of insurance in Florida and various other states. The Company markets, distributes and services its own and third-party insurers’ products and its other services through a network of independent agents. The Company’s insurance lines of business include Homeowners’ Property and Casualty Insurance, Commercial General Liability, Personal Automobile and Flood. FNIC and MNIC underwrite homeowners’ insurance in Florida, and FNIC underwrites insurance in Alabama, Louisiana and South Carolina. Alabama and Louisiana.

Alleghany Company Profile

Alleghany Corporation is an insurance holding company. The Company, through its subsidiary Alleghany Insurance Holdings LLC (AIHL) and its subsidiaries, is engaged in the property and casualty insurance business. AIHL’s insurance operations are conducted by its subsidiaries RSUI Group, Inc. (RSUI), CapSpecialty, Inc. (CapSpecialty) and Pacific Compensation Corporation (PacificComp). Its segments include reinsurance and insurance. Its reinsurance segment consists of property and casualty reinsurance operations conducted by Transatlantic Holdings, Inc. reinsurance operating subsidiaries. Its insurance segment consists of property and casualty insurance operations conducted by AIHL through its insurance operating subsidiaries RSUI, CapSpecialty and PacificComp. AIHL Re LLC, which is a captive reinsurance company, provides reinsurance to its insurance operating subsidiaries and affiliates.

Receive News & Ratings for Federated National Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Federated National and related companies with Analyst Ratings Network's FREE daily email newsletter.