EMC Insurance Group (EMCI) versus United Insurance Holdings Corp. (UIHC) Critical Analysis
EMC Insurance Group (NASDAQ: EMCI) and United Insurance Holdings Corp. (NASDAQ:UIHC) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, earnings, valuation, dividends, risk, profitability and institutional ownership.
This is a summary of recent recommendations and price targets for EMC Insurance Group and United Insurance Holdings Corp., as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|EMC Insurance Group||0||1||0||0||2.00|
|United Insurance Holdings Corp.||0||1||2||1||3.00|
EMC Insurance Group presently has a consensus price target of $30.00, indicating a potential upside of 0.60%. United Insurance Holdings Corp. has a consensus price target of $18.00, indicating a potential upside of 15.46%. Given United Insurance Holdings Corp.’s stronger consensus rating and higher possible upside, analysts plainly believe United Insurance Holdings Corp. is more favorable than EMC Insurance Group.
This table compares EMC Insurance Group and United Insurance Holdings Corp.’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%|
|United Insurance Holdings Corp.||0.73%||4.99%||1.34%|
Risk & Volatility
EMC Insurance Group has a beta of 0.98, meaning that its share price is 2% less volatile than the S&P 500. Comparatively, United Insurance Holdings Corp. has a beta of 1.54, meaning that its share price is 54% more volatile than the S&P 500.
Institutional & Insider Ownership
28.2% of EMC Insurance Group shares are held by institutional investors. Comparatively, 29.1% of United Insurance Holdings Corp. shares are held by institutional investors. 4.5% of EMC Insurance Group shares are held by company insiders. Comparatively, 22.6% of United Insurance Holdings Corp. 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.
Valuation & Earnings
This table compares EMC Insurance Group and United Insurance Holdings Corp.’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|EMC Insurance Group||$640.91 million||0.99||$46.20 million||$1.79||16.66|
|United Insurance Holdings Corp.||$487.12 million||1.37||$5.69 million||$0.02||779.50|
EMC Insurance Group has higher revenue and earnings than United Insurance Holdings Corp.. EMC Insurance Group is trading at a lower price-to-earnings ratio than United Insurance Holdings Corp., indicating that it is currently the more affordable of the two stocks.
EMC Insurance Group pays an annual dividend of $0.84 per share and has a dividend yield of 2.8%. United Insurance Holdings Corp. pays an annual dividend of $0.24 per share and has a dividend yield of 1.5%. EMC Insurance Group pays out 46.9% of its earnings in the form of a dividend. United Insurance Holdings Corp. pays out 1,200.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. EMC Insurance Group is clearly the better dividend stock, given its higher yield and lower payout ratio.
United Insurance Holdings Corp. beats EMC Insurance Group on 9 of the 17 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.
United Insurance Holdings Corp. Company Profile
United Insurance Holdings Corp. is a property and casualty insurance holding company that sources, writes and services residential property and casualty insurance policies using a network of agents and a group of insurance subsidiaries. The Company’s insurance subsidiary is United Property & Casualty Insurance Company. Its other subsidiaries include United Insurance Management, L.C., the managing general agent that manages substantially all aspects of United Property & Casualty Insurance Company’s business; Skyway Claims Services, LLC, which provides services to its insurance affiliate; UPC Re, which provides a portion of the reinsurance protection purchased by its insurance affiliate. The Company’s principal product is homeowners’ insurance, which it offers in Connecticut, Florida, Georgia, Hawaii, Louisiana, Massachusetts, New Jersey, North Carolina, Rhode Island, South Carolina and Texas.
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