ProAssurance (NYSE:PRA – Get Free Report) and Octave Specialty Group (NYSE:OSG – Get Free Report) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, earnings, institutional ownership, profitability, dividends, analyst recommendations and valuation.
Profitability
This table compares ProAssurance and Octave Specialty Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| ProAssurance | 5.99% | 6.82% | 1.64% |
| Octave Specialty Group | -75.91% | -0.55% | -0.13% |
Valuation and Earnings
This table compares ProAssurance and Octave Specialty Group”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| ProAssurance | $1.10 billion | 1.17 | $50.92 million | $1.25 | 20.00 |
| Octave Specialty Group | $251.22 million | 1.10 | -$261.69 million | ($4.86) | -1.27 |
ProAssurance has higher revenue and earnings than Octave Specialty Group. Octave Specialty Group is trading at a lower price-to-earnings ratio than ProAssurance, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
ProAssurance has a beta of 0.02, indicating that its share price is 98% less volatile than the S&P 500. Comparatively, Octave Specialty Group has a beta of 0.86, indicating that its share price is 14% less volatile than the S&P 500.
Analyst Recommendations
This is a summary of recent ratings and target prices for ProAssurance and Octave Specialty Group, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| ProAssurance | 0 | 1 | 0 | 1 | 3.00 |
| Octave Specialty Group | 1 | 1 | 1 | 1 | 2.50 |
Octave Specialty Group has a consensus target price of $15.00, suggesting a potential upside of 143.55%. Given Octave Specialty Group’s higher possible upside, analysts clearly believe Octave Specialty Group is more favorable than ProAssurance.
Institutional and Insider Ownership
85.6% of ProAssurance shares are held by institutional investors. Comparatively, 80.9% of Octave Specialty Group shares are held by institutional investors. 1.2% of ProAssurance shares are held by insiders. Comparatively, 7.2% of Octave Specialty Group shares are held 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.
Summary
ProAssurance beats Octave Specialty Group on 10 of the 14 factors compared between the two stocks.
About ProAssurance
ProAssurance Corporation, through its subsidiaries, provides property and casualty insurance, and reinsurance products in the United States. The company operates through Specialty Property and Casualty, Workers’ Compensation Insurance, and Segregated Portfolio Cell Reinsurance segments. It offers professional liability insurance to healthcare providers and institutions, and attorneys and their firms; medical technology liability insurance to medical technology and life sciences companies; and custom alternative risk solutions, including assumed reinsurance, loss portfolio transfers, and captive cell programs for healthcare professional liability insureds. The company also provides workers’ compensation insurance products, such as guaranteed cost policies, policyholder dividend policies, retrospectively rated policies, and deductible policies, as well as alternative market solutions that include program design, fronting, claims administration, risk management, SPC rental, asset management, and SPC management services for individual companies, agencies, groups, and associations. The company also participates in Syndicate 1729 at Lloyd’s of London for underwriting. It markets its products through independent agencies and brokers, as well as an internal business development team. The company was founded in 1976 and is headquartered in Birmingham, Alabama.
About Octave Specialty Group
Ambac Financial Group, Inc. operates as a financial services holding company. It operates three businesses: Specialty Property and Casualty Insurance, Insurance Distribution, and Legacy Financial Guarantee (LFG) Insurance. The Specialty Property and Casualty Insurance business provides specialty property and casualty program insurance with a focus commercial and personal liability risks. The Insurance Distribution business includes the specialty property and casualty insurance distribution business, which includes managing general agents and underwriters, insurance wholesalers, brokers, and other distribution businesses. The LFG Insurance business offers financial guarantee insurance policies that provide an unconditional and irrevocable guarantee, which protects the holder of a debt obligation against non-payment when due of the principal and interest on the obligations guaranteed. Ambac Financial Group, Inc. was incorporated in 1991 and is headquartered in New York, New York.
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