White Mountains Insurance Group (NYSE: WTM) and Alleghany (NYSE:Y) are both mid-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, valuation, dividends, analyst recommendations, institutional ownership and profitability.

Institutional and Insider Ownership

85.2% of White Mountains Insurance Group shares are owned by institutional investors. Comparatively, 81.9% of Alleghany shares are owned by institutional investors. 5.1% of White Mountains Insurance Group shares are owned by company insiders. Comparatively, 4.0% of Alleghany shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares White Mountains Insurance Group and Alleghany’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
White Mountains Insurance Group 167.81% 0.82% 0.64%
Alleghany 1.74% 1.12% 0.37%

Dividends

White Mountains Insurance Group pays an annual dividend of $1.00 per share and has a dividend yield of 0.1%. Alleghany does not pay a dividend. White Mountains Insurance Group pays out -11.6% of its earnings in the form of a dividend.

Risk and Volatility

White Mountains Insurance Group has a beta of 0.45, meaning that its share price is 55% less volatile than the S&P 500. Comparatively, Alleghany has a beta of 0.9, meaning that its share price is 10% less volatile than the S&P 500.

Valuation & Earnings

This table compares White Mountains Insurance Group and Alleghany’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
White Mountains Insurance Group $373.80 million 9.03 $627.20 million ($8.62) -104.65
Alleghany $6.42 billion 1.36 $90.13 million $2.04 279.69

White Mountains Insurance Group has higher earnings, but lower revenue than Alleghany. White Mountains Insurance Group is trading at a lower price-to-earnings ratio than Alleghany, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for White Mountains Insurance Group and Alleghany, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
White Mountains Insurance Group 0 0 0 0 N/A
Alleghany 0 1 1 0 2.50

Alleghany has a consensus price target of $650.00, suggesting a potential upside of 13.92%. Given Alleghany’s higher probable upside, analysts clearly believe Alleghany is more favorable than White Mountains Insurance Group.

Summary

White Mountains Insurance Group beats Alleghany on 8 of the 15 factors compared between the two stocks.

White Mountains Insurance Group Company Profile

White Mountains Insurance Group, Ltd., through its subsidiaries, provides insurance and reinsurance services in the United States. The company operates through HG Global/BAM, MediaAlpha, and Other segments. The HG Global/BAM segment provides insurance on municipal bonds issued to finance public purposes, such as schools, utilities, core governmental functions, and existing transportation facilities. The MediaAlpha segment develops transparent platforms for the buying and selling of insurance and other vertical-specific performance media, such as clicks, calls, and leads; This segment's exchange technology, machine learning, and analytical tools facilitates transparent and real-time transactions between advertisers and publishers. The Other segment provides investment management services; online price comparisons of auto insurance and non-insurance products; management services; and reinsures death and living benefit guarantees associated with variable annuities issued in Japan. White Mountains Insurance Group, Ltd. was founded in 1980 and is headquartered in Hamilton, Bermuda.

Alleghany Company Profile

Alleghany Corporation provides property and casualty reinsurance and insurance products in the United States and internationally. The company operates in two segments, Reinsurance and Insurance. The Reinsurance segment offers property reinsurance products, including fire, allied lines, auto physical damage, and homeowners multiple peril reinsurance products; and casualty and other reinsurance products, such as liability, medical malpractice, ocean marine and aviation, auto liability, accident and health, surety, and credit reinsurance products. This segment distributes its products and services through brokers, as well as directly to insurance and reinsurance companies. The Insurance segment underwrites specialty insurance coverages in the property, as well as umbrella/excess, general, management, and professional liability lines; and surety products comprising commercial and contract surety bonds, as well as workers' compensation insurance products. This segment distributes its products through independent wholesale insurance brokers, and retail and general insurance agents. The company also explores for and produces oil and gas; manufactures custom trailers and truck bodies for the moving and storage industry, and other markets; provides technical engineering services for pharmaceutical and biotechnology industries; and owns and manages improved and unimproved commercial land, and residential lots. In addition, it operates as a toy, and entertainment and musical instrument company; manufacturer/remanufacturer of specialty machine tools, as well as supplier of replacement parts, accessories, and services for various cutting technologies; structural steel fabricator and erector; and provider of products and services for the funeral and cemetery industries, and precast concrete markets. As of December 31, 2017, the company owned approximately 226 acres of property. Alleghany Corporation was founded in 1929 and is based in New York, New York.

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