American Financial Group (NYSE:AFG) and NI (NASDAQ:NODK) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, earnings, profitability, institutional ownership, dividends and risk.

Dividends

American Financial Group pays an annual dividend of $1.60 per share and has a dividend yield of 1.6%. NI does not pay a dividend. American Financial Group pays out 19.0% of its earnings in the form of a dividend. American Financial Group has increased its dividend for 13 consecutive years.

Institutional and Insider Ownership

64.2% of American Financial Group shares are held by institutional investors. Comparatively, 20.4% of NI shares are held by institutional investors. 11.9% of American Financial Group shares are held by insiders. Comparatively, 0.4% of NI shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Volatility & Risk

American Financial Group has a beta of 0.88, indicating that its share price is 12% less volatile than the S&P 500. Comparatively, NI has a beta of 0.15, indicating that its share price is 85% less volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
American Financial Group 7.41% 14.92% 1.22%
NI 14.64% 9.97% 6.00%

Earnings and Valuation

This table compares American Financial Group and NI’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
American Financial Group $7.15 billion 1.27 $530.00 million $8.40 12.04
NI $212.37 million 1.69 $31.08 million N/A N/A

American Financial Group has higher revenue and earnings than NI.

Analyst Recommendations

This is a summary of current recommendations and price targets for American Financial Group and NI, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American Financial Group 0 2 0 0 2.00
NI 0 0 0 0 N/A

American Financial Group presently has a consensus price target of $107.00, indicating a potential upside of 5.80%. Given American Financial Group’s higher probable upside, analysts clearly believe American Financial Group is more favorable than NI.

Summary

American Financial Group beats NI on 9 of the 14 factors compared between the two stocks.

About American Financial Group

American Financial Group, Inc., an insurance holding company, provides property and casualty insurance products in the United States. The company operates through three segments: Property and Casualty Insurance, Annuity, and Other. It offers property and transportation insurance products, such as physical damage and liability coverage for buses, trucks and recreational vehicles, inland and ocean marine, agricultural-related products, and other property; specialty casualty insurance, including primarily excess and surplus, general liability, executive liability, professional liability, umbrella and excess liability, and specialty coverage in targeted markets, as well as customized programs for small to mid-sized businesses and workers' compensation insurance; and specialty financial insurance products comprising risk management insurance programs for leasing and financing institutions, surety and fidelity products, and trade credit insurance. The company sells its property and casualty insurance products through independent insurance agents and brokers, as well as through employee agents. It also provides traditional fixed, fixed-indexed, and variable-indexed annuities to the retail, financial institutions, registered investment advisor, and education markets; and engages in the commercial real estate operations in Cincinnati, Whitefield, New Hampshire, Chesapeake Bay, Charleston, and Palm Beach. American Financial Group, Inc. was founded in 1872 and is headquartered in Cincinnati, Ohio.

About NI

NI Holdings, Inc. underwrites property and casualty insurance products in North Dakota, South Dakota, Nebraska, Minnesota, Nevada, Arizona, and Illinois. Its products include multi-peril crop, crop hail, private passenger automobile, farm owners, homeowners, and commercial property and liability insurance policies, as well as non-standard automobile insurance products. The company distributes its insurance products through independent producers and independent agents. The company was founded in 1946 and is headquartered in Fargo, North Dakota. NI Holdings, Inc. is a subsidiary of Nodak Mutual Group, Inc.

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