Critical Comparison: The Hanover Insurance Group (NYSE:THG) vs. UTG (OTCMKTS:UTGN)

UTG (OTCMKTS:UTGN) and The Hanover Insurance Group (NYSE:THG) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, valuation, risk, dividends, earnings, analyst recommendations and institutional ownership.

Valuation & Earnings

This table compares UTG and The Hanover Insurance Group”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
UTG	$42.35 million	4.30	$17.08 million	$8.79	6.60
The Hanover Insurance Group	$6.59 billion	1.23	$662.50 million	$20.95	11.08

The Hanover Insurance Group has higher revenue and earnings than UTG. UTG is trading at a lower price-to-earnings ratio than The Hanover Insurance Group, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

UTG has a beta of 0.09, indicating that its stock price is 91% less volatile than the S&P 500. Comparatively, The Hanover Insurance Group has a beta of 0.27, indicating that its stock price is 73% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations for UTG and The Hanover Insurance Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
UTG	0	0	0	0	0.00
The Hanover Insurance Group	0	6	3	1	2.50

The Hanover Insurance Group has a consensus target price of $223.29, indicating a potential downside of 3.83%. Given The Hanover Insurance Group’s stronger consensus rating and higher possible upside, analysts clearly believe The Hanover Insurance Group is more favorable than UTG.

Profitability

This table compares UTG and The Hanover Insurance Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
UTG	N/A	11.75%	5.55%
The Hanover Insurance Group	11.17%	21.72%	4.61%

Insider and Institutional Ownership

0.1% of UTG shares are owned by institutional investors. Comparatively, 86.6% of The Hanover Insurance Group shares are owned by institutional investors. 74.2% of UTG shares are owned by company insiders. Comparatively, 2.8% of The Hanover Insurance Group shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

The Hanover Insurance Group beats UTG on 12 of the 15 factors compared between the two stocks.

About UTG

UTG, Inc., an insurance holding company, provides individual life insurance products and services in the United States. Its individual life insurance includes servicing of existing insurance business in-force; the acquisition of other companies in the insurance business; and the administration processing of life insurance business for other entities. In addition, it offers reinsurance products. UTG, Inc. was founded in 1966 and is headquartered in Stanford, Kentucky.

About The Hanover Insurance Group

The Hanover Insurance Group, Inc., through its subsidiaries, provides various property and casualty insurance products and services in the United States. The company operates through four segments: Core Commercial, Specialty, Personal Lines, and Other. The Commercial Lines segment offers commercial multiple peril, commercial automobile, workers' compensation, and other commercial lines coverage. The Specialty segment provides professional and executive Lines, marine, and surety and other, as well as specialty property and casualty, such as program business, specialty industrial business, excess and surplus business, and specialty general liability coverage. The Personal Lines segment offers personal automobile and homeowner's coverages, as well as other personal coverages, such as personal umbrella, inland marine, fire, personal watercraft, personal cyber, and other miscellaneous coverages. The Other segment markets investment advisory services to institutions, insurance companies, pension funds, and other organizations. The Hanover Insurance Group, Inc. markets its products and services through independent agents and brokers. The company was formerly known as Allmerica Financial Corp. and changed its name to The Hanover Insurance Group, Inc. in December 2005. The Hanover Insurance Group, Inc. was founded in 1852 and is headquartered in Worcester, Massachusetts.