Critical Comparison: Alleghany Corporation (Y) and Loews Corporation (L)
Alleghany Corporation (NYSE: Y) and Loews Corporation (NYSE:L) are both mid-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, earnings, dividends, risk, valuation, analyst recommendations and institutional ownership.
Insider and Institutional Ownership
81.8% of Alleghany Corporation shares are held by institutional investors. Comparatively, 58.6% of Loews Corporation shares are held by institutional investors. 4.0% of Alleghany Corporation shares are held by insiders. Comparatively, 11.8% of Loews Corporation shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
This is a summary of recent ratings and recommmendations for Alleghany Corporation and Loews Corporation, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Loews Corporation has a consensus target price of $39.00, suggesting a potential downside of 16.27%. Given Loews Corporation’s higher probable upside, analysts clearly believe Loews Corporation is more favorable than Alleghany Corporation.
This table compares Alleghany Corporation and Loews Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Volatility and Risk
Alleghany Corporation has a beta of 0.92, meaning that its share price is 8% less volatile than the S&P 500. Comparatively, Loews Corporation has a beta of 0.71, meaning that its share price is 29% less volatile than the S&P 500.
Loews Corporation pays an annual dividend of $0.25 per share and has a dividend yield of 0.5%. Alleghany Corporation does not pay a dividend. Loews Corporation pays out 7.5% of its earnings in the form of a dividend.
Earnings & Valuation
This table compares Alleghany Corporation and Loews Corporation’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Alleghany Corporation||$6.16 billion||1.41||$888.24 million||$30.86||18.24|
|Loews Corporation||$13.28 billion||1.18||$3.33 billion||$3.32||14.03|
Loews Corporation has higher revenue and earnings than Alleghany Corporation. Loews Corporation is trading at a lower price-to-earnings ratio than Alleghany Corporation, indicating that it is currently the more affordable of the two stocks.
Alleghany Corporation beats Loews Corporation on 9 of the 15 factors compared between the two stocks.
About Alleghany Corporation
Alleghany Corporation is an insurance holding company. The Company, through its subsidiary Alleghany Insurance Holdings LLC (AIHL) and its subsidiaries, is engaged in the property and casualty insurance business. AIHL’s insurance operations are conducted by its subsidiaries RSUI Group, Inc. (RSUI), CapSpecialty, Inc. (CapSpecialty) and Pacific Compensation Corporation (PacificComp). Its segments include reinsurance and insurance. Its reinsurance segment consists of property and casualty reinsurance operations conducted by Transatlantic Holdings, Inc. reinsurance operating subsidiaries. Its insurance segment consists of property and casualty insurance operations conducted by AIHL through its insurance operating subsidiaries RSUI, CapSpecialty and PacificComp. AIHL Re LLC, which is a captive reinsurance company, provides reinsurance to its insurance operating subsidiaries and affiliates.
About Loews Corporation
Loews Corporation is a holding company. The Company, through its subsidiaries, is engaged in commercial property and casualty insurance; operation of offshore oil and gas drilling rigs; transportation and storage of natural gas and natural gas liquids, and operation of a chain of hotels. The Company has five segments consisted of its four individual operating subsidiaries, CNA Financial Corporation (CNA), Diamond Offshore Drilling, Inc. (Diamond Offshore), Boardwalk Pipeline Partners, LP (Boardwalk Pipeline) and Loews Hotels Holding Corporation (Loews Hotels), and the Corporate segment. CNA’s insurance products include commercial property and casualty coverages, including surety. CNA’s services include risk management, information services, warranty and claims administration. CNA’s core business, commercial property and casualty insurance operations include Specialty, Commercial and International lines of business.
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