James River Group (NASDAQ: JRVR) and Safety Insurance Group (NASDAQ:SAFT) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their valuation, institutional ownership, analyst recommendations, dividends, earnings, profitability and risk.

Analyst Recommendations

This is a summary of current ratings and target prices for James River Group and Safety Insurance Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
James River Group 0 1 3 0 2.75
Safety Insurance Group 0 1 0 0 2.00

James River Group currently has a consensus price target of $42.50, indicating a potential upside of 12.05%. Safety Insurance Group has a consensus price target of $70.00, indicating a potential downside of 18.60%. Given James River Group’s stronger consensus rating and higher probable upside, analysts clearly believe James River Group is more favorable than Safety Insurance Group.

Insider & Institutional Ownership

98.3% of James River Group shares are held by institutional investors. Comparatively, 79.4% of Safety Insurance Group shares are held by institutional investors. 15.0% of James River Group shares are held by company insiders. Comparatively, 4.9% of Safety Insurance Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Volatility and Risk

James River Group has a beta of 0.46, indicating that its share price is 54% less volatile than the S&P 500. Comparatively, Safety Insurance Group has a beta of 0.68, indicating that its share price is 32% less volatile than the S&P 500.

Profitability

This table compares James River Group and Safety Insurance Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
James River Group 4.74% 6.56% 1.70%
Safety Insurance Group 7.05% 8.80% 3.37%

Valuation and Earnings

This table compares James River Group and Safety Insurance Group’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
James River Group $817.63 million 1.39 $43.56 million $1.57 24.16
Safety Insurance Group $839.11 million 1.57 $62.38 million N/A N/A

Safety Insurance Group has higher revenue and earnings than James River Group.

Dividends

James River Group pays an annual dividend of $1.20 per share and has a dividend yield of 3.2%. Safety Insurance Group pays an annual dividend of $3.20 per share and has a dividend yield of 3.7%. James River Group pays out 76.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Safety Insurance Group beats James River Group on 9 of the 15 factors compared between the two stocks.

James River Group Company Profile

James River Group Holdings, Ltd., through its subsidiaries, provides specialty insurance and reinsurance services in the United States. Its Excess and Surplus Lines segment underwrites property and liability insurance on an excess and surplus commercial lines basis in all states and the District of Columbia. This segment distributes its insurance policies primarily through wholesale insurance brokers. The company's Specialty Admitted Insurance segment provides workers' compensation coverage for residential contractors, light manufacturing operations, transportation workers, healthcare workers, and fronting and program business in North Carolina, Georgia, New Jersey, South Carolina, Pennsylvania, Massachusetts, Rhode Island, Virginia, South Carolina, and Tennessee. Its Casualty Reinsurance segment offers proportional and working layer casualty reinsurance to third parties and unaffiliated insurance companies. James River Group Holdings, Ltd. was founded in 2002 and is headquartered in Pembroke, Bermuda.

Safety Insurance Group Company Profile

Safety Insurance Group, Inc. provides private passenger and commercial automobile insurance in Massachusetts, New Hampshire, and Maine, the United States. The company's private passenger automobile policies offer coverage for bodily injury and property damage to others, no-fault personal injury coverage for the insured/insured's car occupants, and physical damage coverage for an insured's own vehicle for collision or other perils. It also provides commercial automobile policies that offer insurance for commercial vehicles used for business purposes, including private passenger-type vehicles, trucks, tractors and trailers, insure individual vehicles, and commercial fleets; and homeowners policies, which provide coverage for homes, condominiums, and apartments for losses to a dwelling and its contents from various perils, and coverage for liability to others arising from ownership or occupancy. In addition, the company offers business owners policies that cover apartments and residential condominiums, restaurants, office condominiums, processing and services businesses, special trade contractors, and wholesalers. Further, it provides personal umbrella policies, which provide personal excess liability coverage over and above the limits of individual automobile, watercraft, and homeowner's insurance policies; and commercial umbrella policies, as well as underwrites dwelling fire insurance for non-owner occupied residences. Additionally, the company offers inland marine coverage for homeowners and business owner policies; and watercraft coverage for small and medium sized pleasure crafts. It distributes its products through independent agents. The company was formerly known as Safety Holdings Inc and changed its name to Safety Insurance Group, Inc. in April 2002. Safety Insurance Group, Inc. was founded in 1979 and is based in Boston, Massachusetts.

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