Analyzing Atlas Financial (OTCMKTS:AFHIF) & First American Financial (NYSE:FAF)

Atlas Financial (OTCMKTS:AFHIF) and First American Financial (NYSE:FAF) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, valuation, risk, dividends and analyst recommendations.

Profitability

This table compares Atlas Financial and First American Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Atlas Financial	N/A	N/A	N/A
First American Financial	9.33%	13.31%	4.14%

Insider & Institutional Ownership

89.0% of First American Financial shares are owned by institutional investors. 14.4% of Atlas Financial shares are owned by insiders. Comparatively, 3.5% of First American Financial shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Atlas Financial and First American Financial, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Atlas Financial	0	0	0	0	0.00
First American Financial	0	1	7	0	2.88

First American Financial has a consensus target price of $84.60, indicating a potential upside of 14.45%. Given First American Financial’s stronger consensus rating and higher possible upside, analysts plainly believe First American Financial is more favorable than Atlas Financial.

Earnings & Valuation

This table compares Atlas Financial and First American Financial”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Atlas Financial	N/A	N/A	N/A	($0.78)	N/A
First American Financial	$7.45 billion	1.01	$621.80 million	$7.22	10.24

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

Summary

First American Financial beats Atlas Financial on 9 of the 10 factors compared between the two stocks.

About Atlas Financial

Atlas Financial Holdings, Inc., through its subsidiary, Anchor Group Management, Inc., engages in generating, underwriting, and servicing of commercial automobile insurance in the United States. The company's automobile insurance products provide insurance coverage in three areas, including liability, accident benefits, and physical damage. It focuses on the light commercial automobile sector, including taxi cabs, non-emergency paratransit, limousine, livery, and business autos. It distributes its insurance products through a network of independent retail agents. Atlas Financial Holdings, Inc. was founded in 2009 and is headquartered in Schaumburg, Illinois.

About First American Financial

First American Financial Corporation, through its subsidiaries, provides financial services. It operates through Title Insurance and Services, and Home Warranty segments. The Title Insurance and Services segment issues title insurance policies on residential and commercial property, as well as offers related products and services internationally. This segment also provides closing and/or escrow services; products, services, and solutions to mitigate risk or otherwise facilitate real estate transactions; and appraisals and other valuation-related products and services, lien release and document custodial services, warehouse lending services, default-related products and services, document generation services, mortgage loans subservicing, and related products and services, as well as banking, trust, and wealth management services. In addition, it accommodates tax-deferred exchanges of real estate; and maintains, manages, and provides access to title plant data and records. This segment offers its products through a network of direct operations and agents in various states and in the District of Columbia, as well as in Canada, the United Kingdom, Australia, New Zealand, South Korea, and internationally. The Home Warranty segment provides home warranty products, including residential service contracts that cover residential systems, such as heating and air conditioning systems, and various appliances against failures that occur as the result of normal usage during the coverage period. This segment operates in various states and the District of Columbia. The company was founded in 1889 and is headquartered in Santa Ana, California.