EMC Insurance Group (NASDAQ: EMCI) and Berkshire Hathaway (NYSE:BRK.B) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, earnings, profitability, dividends, risk, institutional ownership and analyst recommendations.

Dividends

EMC Insurance Group pays an annual dividend of $0.84 per share and has a dividend yield of 3.0%. Berkshire Hathaway does not pay a dividend. EMC Insurance Group pays out 46.9% of its earnings in the form of a dividend.

Volatility and Risk

EMC Insurance Group has a beta of 0.92, meaning that its share price is 8% less volatile than the S&P 500. Comparatively, Berkshire Hathaway has a beta of 0.87, meaning that its share price is 13% less volatile than the S&P 500.

Insider and Institutional Ownership

28.2% of EMC Insurance Group shares are held by institutional investors. Comparatively, 35.3% of Berkshire Hathaway shares are held by institutional investors. 4.5% of EMC Insurance Group shares are held by company insiders. Comparatively, 11.0% of Berkshire Hathaway shares are held by company 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.

Analyst Recommendations

This is a breakdown of recent ratings for EMC Insurance Group and Berkshire Hathaway, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
EMC Insurance Group 0 0 0 0 N/A
Berkshire Hathaway 1 1 2 0 2.25

Berkshire Hathaway has a consensus target price of $207.50, indicating a potential upside of Infinity. Given Berkshire Hathaway’s higher possible upside, analysts plainly believe Berkshire Hathaway is more favorable than EMC Insurance Group.

Profitability

This table compares EMC Insurance Group and Berkshire Hathaway’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
EMC Insurance Group 5.87% 5.66% 1.98%
Berkshire Hathaway 9.08% 5.83% 2.66%

Valuation & Earnings

This table compares EMC Insurance Group and Berkshire Hathaway’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
EMC Insurance Group $649.90 million 0.93 $38.22 million $1.79 15.76
Berkshire Hathaway N/A N/A N/A $8.85 N/A

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

Summary

Berkshire Hathaway beats EMC Insurance Group on 10 of the 13 factors compared between the two stocks.

EMC Insurance Group Company Profile

EMC Insurance Group Inc. is an insurance holding company. The Company operates through two segments: Property and Casualty Insurance and Reinsurance segment. It conducts its property and casualty insurance operations through its subsidiaries, including EMCASCO Insurance Company, Illinois EMCASCO Insurance Company and Dakota Fire Insurance Company, and its reinsurance operations through its subsidiary, EMC Reinsurance Company. The Company focuses on the sale of commercial lines of property and casualty insurance to small and medium-sized businesses. The Company offered its insurance products in 41 states, as of December 31, 2016. The Company is owned by Employers Mutual Casualty Company (Employers Mutual), a multiple-line property and casualty insurance company. The Company’s insurance agency, EMC Underwriters, LLC (EMC Underwriters), specializes in marketing excess and surplus lines of insurance.

Berkshire Hathaway Company Profile

Berkshire Hathaway Inc. is a holding company owning subsidiaries engaged in various business activities. Its segments include Insurance, such as GEICO, Berkshire Hathaway Primary Group, General Re Corporation and Berkshire Hathaway Reinsurance Group; Burlington Northern Santa Fe, LLC, which is engaged in the operation of the railroad system; Berkshire Hathaway Energy, which includes regulated electric and gas utility; Manufacturing, which includes manufacturers of various products, including industrial, consumer and building products; McLane Company, which is engaged in the wholesale distribution of groceries and non-food items; Service and retailing, which includes providers of various services, including fractional aircraft ownership programs, aviation pilot training and various retailing businesses, and Finance and financial products, which includes manufactured housing and related consumer financing, transportation equipment, manufacturing and leasing, and furniture leasing.

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