Atlas Financial Holdings (NASDAQ: AFH) and Safety Insurance Group (NASDAQ:SAFT) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, profitability, dividends, analyst recommendations, valuation, institutional ownership and risk.

Earnings and Valuation

This table compares Atlas Financial Holdings and Safety Insurance Group’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Atlas Financial Holdings $177.58 million 1.36 $2.64 million $0.14 143.22
Safety Insurance Group $819.82 million 1.52 $64.58 million $4.15 19.81

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

Analyst Ratings

This is a summary of recent ratings and price targets for Atlas Financial Holdings and Safety Insurance Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Atlas Financial Holdings 0 0 3 0 3.00
Safety Insurance Group 1 0 0 0 1.00

Atlas Financial Holdings currently has a consensus target price of $18.50, suggesting a potential downside of 7.73%. Given Atlas Financial Holdings’ stronger consensus rating and higher possible upside, equities analysts clearly believe Atlas Financial Holdings is more favorable than Safety Insurance Group.

Dividends

Safety Insurance Group pays an annual dividend of $3.20 per share and has a dividend yield of 3.9%. Atlas Financial Holdings does not pay a dividend. Safety Insurance Group pays out 77.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Volatility & Risk

Atlas Financial Holdings has a beta of 0.89, suggesting that its share price is 11% less volatile than the S&P 500. Comparatively, Safety Insurance Group has a beta of 0.8, suggesting that its share price is 20% less volatile than the S&P 500.

Profitability

This table compares Atlas Financial Holdings and Safety Insurance Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Atlas Financial Holdings 0.92% -2.57% -0.78%
Safety Insurance Group 7.57% 9.18% 3.51%

Institutional & Insider Ownership

80.3% of Atlas Financial Holdings shares are owned by institutional investors. Comparatively, 78.0% of Safety Insurance Group shares are owned by institutional investors. 12.7% of Atlas Financial Holdings shares are owned by company insiders. Comparatively, 4.9% of Safety Insurance Group shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

Safety Insurance Group beats Atlas Financial Holdings on 8 of the 15 factors compared between the two stocks.

About Atlas Financial Holdings

Atlas Financial Holdings Inc formerly JJR VI Acquisition Corp is a Canada-based company. It is engaged in the business of providing commercial automobile insurance in the United States with a niche market orientation. The Company’s automobile insurance products provide coverage in three areas: liability, accident benefits and physical damage. Liability insurance provides coverage where the insured is responsible for an automobile accident, for the payment for injuries and property damage to third parties. Accident benefit policies or personal injury protection policies provide coverage for loss of income, medical and rehabilitation expenses for insured persons who are injured in an automobile accident, Physical damage coverages provide for the payment of damages to an insured automobile arising from a collision with another object or from other risks. In January 2013, the Company acquired Camelot Services Inc. and its insurance subsidiary, Gateway Insurance Company.

About Safety Insurance Group

Safety Insurance Group, Inc. is a provider of private passenger automobile insurance. The Company offers a portfolio of property and casualty insurance products. The Company is engaged in property and casualty insurance operations. The Company’s product line includes private passenger automobile, commercial automobile, homeowners, business owners’ policies, personal umbrella, dwelling fire, commercial umbrella, inland marine and watercraft. The Company operates through its insurance company subsidiaries, Safety Insurance Company, Safety Indemnity Insurance Company, and Safety Property and Casualty Insurance Company. Private passenger automobile policies provide 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. Commercial automobile policies provide coverage for bodily injury and property damage to others.

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