AmTrust Financial Services (NASDAQ:AFSI) and Allstate (NYSE:ALL) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, institutional ownership, risk, earnings, dividends and valuation.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for AmTrust Financial Services and Allstate, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AmTrust Financial Services 0 3 0 0 2.00
Allstate 0 7 5 0 2.42

AmTrust Financial Services currently has a consensus price target of $14.83, suggesting a potential upside of 0.56%. Allstate has a consensus price target of $101.40, suggesting a potential upside of 9.67%. Given Allstate’s stronger consensus rating and higher possible upside, analysts plainly believe Allstate is more favorable than AmTrust Financial Services.

Volatility & Risk

AmTrust Financial Services has a beta of 1.09, indicating that its share price is 9% more volatile than the S&P 500. Comparatively, Allstate has a beta of 0.82, indicating that its share price is 18% less volatile than the S&P 500.

Valuation and Earnings

This table compares AmTrust Financial Services and Allstate’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
AmTrust Financial Services $5.96 billion 0.49 -$348.88 million N/A N/A
Allstate $39.82 billion 0.80 $3.19 billion $8.07 11.46

Allstate has higher revenue and earnings than AmTrust Financial Services.

Dividends

AmTrust Financial Services pays an annual dividend of $0.34 per share and has a dividend yield of 2.3%. Allstate pays an annual dividend of $1.84 per share and has a dividend yield of 2.0%. Allstate pays out 22.8% of its earnings in the form of a dividend. AmTrust Financial Services has raised its dividend for 12 consecutive years and Allstate has raised its dividend for 8 consecutive years. AmTrust Financial Services is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares AmTrust Financial Services and Allstate’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AmTrust Financial Services 3.98% -17.61% -1.84%
Allstate 5.66% 14.00% 2.55%

Institutional and Insider Ownership

38.0% of AmTrust Financial Services shares are held by institutional investors. Comparatively, 77.1% of Allstate shares are held by institutional investors. 50.8% of AmTrust Financial Services shares are held by insiders. Comparatively, 1.4% of Allstate shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

Allstate beats AmTrust Financial Services on 10 of the 16 factors compared between the two stocks.

AmTrust Financial Services Company Profile

AmTrust Financial Services, Inc. provides property and casualty insurance in the United States and internationally. The company operates in three segments: Small Commercial Business, Specialty Risk and Extended Warranty, and Specialty Program. The Small Commercial Business segment offers workers' compensation insurance products; and commercial package, and other property and casualty insurance products, such as commercial property, general liability, inland marine, employment practices liability, commercial automobile, and umbrella coverage to small businesses. The Specialty Risk and Extended Warranty segment provides custom designed coverages, such as accidental damage plans, mechanical breakdown protection, and payment protection plans in connection with the sale of consumer and commercial goods; and coverage for niche property, casualty, and specialty liability risks comprising general liability, employers' liability, and professional and medical liability. The Specialty Program segment offers workers' compensation, general liability, commercial auto liability, property coverage, excess and surplus lines programs, and other specialty commercial property and casualty insurance products to small and middle market companies. The company also provides reinsurance services primarily for personal and commercial automotive business. It distributes its policies third-party brokers, agents, retailers, or administrators. AmTrust Financial Services, Inc. was founded in 1998 and is based in New York, New York.

Allstate Company Profile

The Allstate Corporation, together with its subsidiaries, engages in property and casualty insurance, and life insurance businesses in the United States and Canada. The company's Allstate Protection segment sells private passenger auto and homeowners insurance; specialty auto products, including motorcycle, trailer, motor home, and off-road vehicle insurance policies; other personal lines products, including renter, condominium, landlord, boat, umbrella, and manufactured home insurance policies; and commercial lines products under the Allstate, Esurance, and Encompass brand names. Its Service Businesses segment provides consumer electronics and appliance protection plans covering products, including TVs, smartphones, and computers; device and mobile data collection services, analytics and customer risk assessment solutions, and telematics services; roadside assistance services, such as towing, jump-start, lockout, fuel delivery, and tire change services; and vehicle service contracts, guaranteed asset protection waivers, road hazard tire and wheel protection, and paintless dent repair protection services under the SquareTrade, Arity, Allstate Roadside Services, and Allstate Dealer Services brands. The company's Allstate Life Segment offers term, whole, interest-sensitive, and variable life insurance products, as well as non-proprietary retirement product solutions offered by third-party providers. Its Allstate Benefits segment provides life, accident, critical illness, short-term disability, and other health insurance products. The Allstate Corporation sells its products through agencies, as well as directly through contact centers and Internet; and financial specialists, brokers, relationships with wholesale partners, and affinity groups. The company was founded in 1931 and is based in Northbrook, Illinois.

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