Critical Analysis: Selective Insurance Group (NASDAQ:SIGI) vs. Loews (NYSE:L)
Selective Insurance Group (NASDAQ:SIGI – Get Rating) and Loews (NYSE:L – Get Rating) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their analyst recommendations, earnings, dividends, valuation, risk, profitability and institutional ownership.
This is a summary of recent ratings and target prices for Selective Insurance Group and Loews, as reported by MarketBeat.
|Sales Ratings||Hold odds||Buy reviews||Strong buy odds||Rating|
|Selective insurance group||0||3||1||0||2.25|
Selective Insurance Group currently has a consensus target price of $84.75, suggesting a potential upside of 4.49%. Loews has a consensus target price of $112.00, suggesting a potential upside of 73.81%. Given Loews’ stronger consensus rating and higher possible upside, analysts clearly think Loews is more favorable than Selective Insurance Group.
Risk and Volatility
Selective Insurance Group has a beta of 0.83, which means its stock price is 17% less volatile than the S&P 500. In comparison, Loews has a beta of 0.85, which means its stock price is 15% less volatile than the S&P 500.
Benefits and evaluation
This table compares the gross revenue, earnings per share and valuation of Selective Insurance Group and Loews.
|Gross revenue||Price/sales ratio||Net revenue||Earnings per share||Price/earnings ratio|
|Selective insurance group||$3.38 billion||1.45||$403.84 million||$5.64||2:38 p.m.|
|Loews||$14.66 billion||1.08||$1.58 billion||$6.44||10.01|
Loews has higher revenues and profits than Selective Insurance Group. Loews trades at a lower price-to-earnings ratio than Selective Insurance Group, indicating that it is currently the more affordable of the two stocks.
Selective Insurance Group pays an annual dividend of $1.12 per share and has a dividend yield of 1.4%. Loews pays an annual dividend of $0.25 per share and has a dividend yield of 0.4%. Selective Insurance Group pays 19.9% of its profits as a dividend. Loews pays 3.9% of its profits as a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings over the next few years. Selective Insurance Group has increased its dividend for 8 consecutive years. Selective Insurance Group is clearly the better dividend-paying stock, given its higher yield and longer track record of dividend growth.
This table compares the net margins, return on equity and return on assets of Selective Insurance Group and Loews.
|Net margins||Return on equity||return on assets|
|Selective insurance group||10.19%||13.58%||3.58%|
Insider and Institutional Ownership
81.4% of the shares of Selective Insurance Group are held by institutional investors. Comparatively, 61.1% of Loews shares are held by institutional investors. 2.0% of the shares of Selective Insurance Group are held by insiders of the company. Comparatively, 17.5% of Loews stock is held by company insiders. Strong institutional ownership is an indication that endowments, large fund managers, and hedge funds believe a company will outperform the market over the long term.
Loews beats Selective Insurance Group on 9 out of 16 factors compared between the two stocks.
About Selective Insurance Group (Get a rating)
Selective Insurance Group, Inc., together with its subsidiaries, provides insurance products and services in the United States. It operates through four segments: Standard Business Lines, Standard Personal Lines, E&S Lines and Investments. The company offers property insurance products, which cover the financial consequences of the accidental loss of an insured’s real estate, personal property and/or income due to property loss; and civil liability insurance products that cover the financial consequences of accidents to employees in the context of employment, and bodily and/or material damage to third parties, as well as flood insurance products. It also invests in fixed income investments and commercial mortgages, as well as in equity securities and a portfolio of alternative investments. The Company offers its insurance products and services to businesses, non-profit organizations, local governments and individuals through independent retail agents and wholesale general agents. Selective Insurance Group, Inc. was founded in 1926 and is headquartered in Branchville, New Jersey.
About Loews (Get a rating)
Loews Corporation provides commercial property and casualty insurance in the United States and internationally. The Company offers specialty insurance products, such as executive and professional liability, and other coverage products; bonds and surety bonds; property insurance products which include property, marine and boiler and machinery coverage; and property and casualty insurance products, such as workers’ compensation, general and product liability, and commercial automobile and umbrella coverages. It also offers loss-sensitive insurance programs; and warranty, risk management, information and claims administration services. The company markets its insurance products and services through independent agents, brokers and managing general underwriters. Additionally, the Company is involved in the transportation and storage of natural gas and natural gas liquids (NGLs) and hydrocarbons through natural gas pipelines spanning approximately 13,615 miles of interconnected pipelines; 450 miles of NGL pipelines in Louisiana and Texas; 14 underground storage fields with an aggregate gas capacity of approximately 213 billion cubic feet of natural gas; and eleven salt dome caverns and associated brine infrastructure to provide brine supply services. Additionally, the company operates a chain of 26 hotels; and develops, manufactures and markets a range of blow molded and injection molded plastic containers for customers in the pharmaceutical, dairy, household chemical, food/nutraceutical, industrial/specialty and water and beverage/juice industries, as well as manufactures basic and differentiated plastic resins from recycled plastic materials. Loews Corporation was incorporated in 1969 and is headquartered in New York, New York.
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