Critical Review: National General (NGHC) & James River Group (JRVR)
National General (NASDAQ:NGHC) and James River Group (NASDAQ:JRVR) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, profitability, earnings, institutional ownership, valuation and risk.
National General pays an annual dividend of $0.16 per share and has a dividend yield of 0.6%. James River Group pays an annual dividend of $1.20 per share and has a dividend yield of 2.8%. National General pays out 14.7% of its earnings in the form of a dividend. James River Group pays out 76.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
This is a summary of recent ratings and price targets for National General and James River Group, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|James River Group||0||1||3||0||2.75|
National General currently has a consensus target price of $30.00, suggesting a potential upside of 13.64%. James River Group has a consensus target price of $43.75, suggesting a potential upside of 3.72%. Given National General’s higher possible upside, equities research analysts plainly believe National General is more favorable than James River Group.
This table compares National General and James River Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|James River Group||4.88%||7.01%||1.74%|
Valuation and Earnings
This table compares National General and James River Group’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|National General||$4.43 billion||0.64||$105.84 million||$1.09||24.22|
|James River Group||$817.63 million||1.54||$43.56 million||$1.57||26.87|
National General has higher revenue and earnings than James River Group. National General is trading at a lower price-to-earnings ratio than James River Group, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
48.4% of National General shares are owned by institutional investors. Comparatively, 98.6% of James River Group shares are owned by institutional investors. 3.4% of National General shares are owned by insiders. Comparatively, 15.0% of James River Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Volatility and Risk
National General has a beta of 0.92, indicating that its stock price is 8% less volatile than the S&P 500. Comparatively, James River Group has a beta of 0.46, indicating that its stock price is 54% less volatile than the S&P 500.
James River Group beats National General on 8 of the 15 factors compared between the two stocks.
National General Company Profile
National General Holdings Corp., a specialty personal lines insurance holding company, provides various insurance products and services in the United States. The company operates in two segments, Property and Casualty, and Accident and Health. The Property and Casualty segment offers standard, preferred, and nonstandard automobile insurance products; and recreational vehicle (RV) insurance products that carry RV-specific endorsements comprising automatic personal effects coverage, optional replacement cost coverage, RV storage coverage, and full-time liability coverage. It also provides homeowners policies consisting of property and liability coverages for one-and two-family, and owner-occupied residences, as well as additional personal umbrella coverage to the homeowners. In addition, this segment offers small business automobile insurance products, which covers liability and physical damage caused by light-to-medium duty commercial vehicles; motorcycle insurance products for various types of motorcycles, as well as golf carts and all-terrain vehicles; and lender-placed insurance products, including fire, home, and flood products, as well as collateral protection insurance and guaranteed asset protection products for automobiles. The Accident and Health segment provides accident and non-major medical health insurance products, such as accident/AD&D coverage in the event of bodily injury or death due to accidental means; hospital indemnity; short term coverage post discharge from acute care/rehab center to the nursing home setting; and short-term medical plans. This segment also offers cancer/critical illness policies, stop loss programs for small and large employers, and basic dental and vision coverage products. In addition, it distributes life and health insurance to groups and individuals. The company was formerly known as American Capital Acquisition Corporation. National General Holdings Corp. was founded in 1939 and is headquartered in New York, New York.
James River Group Company Profile
James River Group Holdings, Ltd., through its subsidiaries, provides specialty insurance and reinsurance services in the United States. Its Excess and Surplus Lines segment underwrites property and liability insurance on an excess and surplus commercial lines basis in all states and the District of Columbia. This segment distributes its insurance policies primarily through wholesale insurance brokers. The company's Specialty Admitted Insurance segment provides workers' compensation coverage for residential contractors, light manufacturing operations, transportation workers, healthcare workers, and fronting and program business in North Carolina, Georgia, New Jersey, South Carolina, Pennsylvania, Massachusetts, Rhode Island, Virginia, South Carolina, and Tennessee. Its Casualty Reinsurance segment offers proportional and working layer casualty reinsurance to third parties and unaffiliated insurance companies. James River Group Holdings, Ltd. was founded in 2002 and is headquartered in Pembroke, Bermuda.
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