Critical Survey: MBIA (NYSE:MBI) vs. Horace Mann Educators (NYSE:HMN)

Horace Mann Educators (NYSE:HMN) and MBIA (NYSE:MBI) are both small-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, risk, institutional ownership, earnings, profitability, valuation and analyst recommendations.

Profitability

This table compares Horace Mann Educators and MBIA’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Horace Mann Educators	10.15%	14.08%	1.35%
MBIA	-154.26%	N/A	-1.69%

Institutional and Insider Ownership

99.3% of Horace Mann Educators shares are owned by institutional investors. Comparatively, 61.0% of MBIA shares are owned by institutional investors. 3.6% of Horace Mann Educators shares are owned by company insiders. Comparatively, 11.3% of MBIA shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Volatility and Risk

Horace Mann Educators has a beta of 0.08, indicating that its stock price is 92% less volatile than the S&P 500. Comparatively, MBIA has a beta of 1.76, indicating that its stock price is 76% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and price targets for Horace Mann Educators and MBIA, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Horace Mann Educators	0	1	1	1	3.00
MBIA	1	0	1	0	2.00

Horace Mann Educators presently has a consensus price target of $59.00, suggesting a potential upside of 23.52%. MBIA has a consensus price target of $7.00, suggesting a potential upside of 52.74%. Given MBIA’s higher possible upside, analysts clearly believe MBIA is more favorable than Horace Mann Educators.

Earnings and Valuation

This table compares Horace Mann Educators and MBIA”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Horace Mann Educators	$1.70 billion	1.14	$162.10 million	$4.28	11.16
MBIA	$80.00 million	2.92	-$177.00 million	($2.89)	-1.59

Horace Mann Educators has higher revenue and earnings than MBIA. MBIA is trading at a lower price-to-earnings ratio than Horace Mann Educators, indicating that it is currently the more affordable of the two stocks.

Summary

Horace Mann Educators beats MBIA on 10 of the 14 factors compared between the two stocks.

About Horace Mann Educators

Horace Mann Educators Corporation, together with its subsidiaries, operates as an insurance holding company in the United States. The company operates through Property & Casualty, Life & Retirement, and Supplemental & Group Benefits segments. Its Property & Casualty segment offers insurance products, including private passenger auto insurance, residential home insurance, and personal umbrella insurance; and provides auto coverages including liability and collision, and property coverage for homeowners and renters. The Life & Retirement segment markets tax-qualified fixed, fixed indexed, and variable annuities; and internal revenue code for educator, which allows public school employees and employees of other tax-exempt organizations, such as not-for-profit private schools, to utilize pretax income to make periodic contributions to a qualified retirement plan. The Supplemental & Group Benefits segment offers employer-sponsored products including accident, critical illness, limited-benefit fixed indemnity insurance, term life, and short-term and long-term disability, as well as worksite direct products, such as supplemental heart, cancer, disability, and accident coverage. The company was founded in 1945 and is headquartered in Springfield, Illinois.

About MBIA

MBIA Inc. provides financial guarantee insurance services to public finance markets in the United States. It operates United States (U.S.) Public Finance Insurance, and International and Structured Finance Insurance segments. The company issues financial guarantees for municipal bonds, including tax-exempt and taxable indebtedness of the U.S. political subdivisions, as well as utility districts, airports, health care institutions, higher educational facilities, housing authorities, and other similar agencies and obligations issued by private entities. It also insures the non-U.S. public finance and global structured finance, including asset-backed obligations; and sovereign-related and sub-sovereign bonds, and privately issued bonds used for the financing for utilities, toll roads, bridges, public transportation facilities, and other types of infrastructure projects, as well as offers third-party reinsurance services. MBIA Inc. was founded in 1973 and is headquartered in Purchase, New York.