Head to Head Contrast: State Auto Financial (STFC) and Everest Re Group (RE)
State Auto Financial (NASDAQ:STFC) and Everest Re Group (NYSE:RE) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, valuation, earnings, risk, dividends and profitability.
State Auto Financial pays an annual dividend of $0.40 per share and has a dividend yield of 1.2%. Everest Re Group pays an annual dividend of $5.60 per share and has a dividend yield of 2.5%. State Auto Financial pays out -100.0% of its earnings in the form of a dividend. Everest Re Group pays out 61.5% 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. Everest Re Group has increased its dividend for 6 consecutive years. Everest Re Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This is a breakdown of recent ratings and target prices for State Auto Financial and Everest Re Group, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|State Auto Financial||0||1||0||0||2.00|
|Everest Re Group||0||5||3||0||2.38|
State Auto Financial presently has a consensus price target of $30.00, suggesting a potential downside of 12.49%. Everest Re Group has a consensus price target of $251.63, suggesting a potential upside of 14.56%. Given Everest Re Group’s stronger consensus rating and higher probable upside, analysts plainly believe Everest Re Group is more favorable than State Auto Financial.
Volatility and Risk
State Auto Financial has a beta of 0.44, indicating that its share price is 56% less volatile than the S&P 500. Comparatively, Everest Re Group has a beta of 0.33, indicating that its share price is 67% less volatile than the S&P 500.
Valuation and Earnings
This table compares State Auto Financial and Everest Re Group’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|State Auto Financial||$1.42 billion||1.04||-$10.70 million||($0.40)||-85.70|
|Everest Re Group||$6.61 billion||1.35||$468.96 million||$9.10||24.14|
Everest Re Group has higher revenue and earnings than State Auto Financial. State Auto Financial is trading at a lower price-to-earnings ratio than Everest Re Group, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
34.9% of State Auto Financial shares are owned by institutional investors. Comparatively, 99.7% of Everest Re Group shares are owned by institutional investors. 2.0% of State Auto Financial shares are owned by insiders. Comparatively, 1.3% of Everest Re Group shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
This table compares State Auto Financial and Everest Re Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|State Auto Financial||2.29%||4.62%||1.34%|
|Everest Re Group||14.19%||11.82%||4.12%|
Everest Re Group beats State Auto Financial on 14 of the 17 factors compared between the two stocks.
State Auto Financial Company Profile
State Auto Financial Corporation, through its subsidiaries, engages in writing personal, business, and specialty insurance products. It operates through four segments: Personal Insurance, Commercial Insurance, Specialty Insurance, and Investment Operations. The Personal Insurance segment primarily provides personal automobile, homeowners insurance, and other personal insurance products. The commercial insurance segment primarily provides commercial automobile, commercial multi-peril, fire and allied, general liability, and workers' compensation insurance covering small-to-medium sized commercial insurance market, as well as farm and ranch insurance. The Specialty Insurance segment provides commercial coverages that require specialized product underwriting, claims handling, or risk management services. This segment markets and underwrites specialized property exposures with a focus on catastrophe exposed risks covering property, and general liability; markets and underwrites commercial auto, healthcare, umbrella, property, and general liability coverages; and markets and distributes homogenous risks covering commercial auto, general liability, and property. The Investment Operations segment provides investment management services to affiliated insurance companies. The company markets its products primarily through independent agencies, including retail agencies and wholesale brokers. The company was founded in 1950 and is headquartered in Columbus, Ohio. State Auto Financial Corporation is a subsidiary of State Automobile Mutual Insurance Company.
Everest Re Group Company Profile
Everest Re Group, Ltd., through its subsidiaries, provides reinsurance and insurance products. The company operates through the U.S. Reinsurance, International, Bermuda, and Insurance segments. The U.S. Reinsurance segment writes property and casualty reinsurance; and specialty lines of business, including marine, aviation, surety, and accident and health insurance through reinsurance brokers, as well as directly with ceding companies in the Unites States. The International segment writes foreign property and casualty reinsurance in Canada, Singapore, Brazil, Miami, and New Jersey. The Bermuda segment provides reinsurance and insurance to property and casualty markets through brokers and directly with ceding companies in Bermuda; and reinsurance to the United Kingdom and European markets. The Insurance segment writes property and casualty insurance products directly, as well as through general agents, brokers, and surplus lines brokers in the United States and Canada. The company also provides property and casualty reinsurance and insurance coverages, such as errors and omissions liability, directors' and officers' liability, medical malpractice, and worker's compensation products. Everest Re Group, Ltd. was founded in 1973 and is headquartered in Hamilton, Bermuda.
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