James River Group Holdings (NASDAQ: JRVR) and Old Republic International Corporation (NYSE:ORI) are both property & casualty insurance – nec companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, dividends, earnings, risk, analyst recommendations, valuation and profitability.

Profitability

This table compares James River Group Holdings and Old Republic International Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
James River Group Holdings 8.98% 9.41% 2.74%
Old Republic International Corporation 6.45% 7.50% 1.81%

Dividends

James River Group Holdings pays an annual dividend of $1.20 per share and has a dividend yield of 2.9%. Old Republic International Corporation pays an annual dividend of $0.76 per share and has a dividend yield of 3.7%. James River Group Holdings pays out 52.6% of its earnings in the form of a dividend. Old Republic International Corporation pays out 56.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. James River Group Holdings has increased its dividend for 35 consecutive years.

Insider and Institutional Ownership

92.4% of James River Group Holdings shares are held by institutional investors. Comparatively, 71.1% of Old Republic International Corporation shares are held by institutional investors. 41.0% of James River Group Holdings shares are held by company insiders. Comparatively, 2.3% of Old Republic International Corporation shares are held 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.

Analyst Ratings

This is a summary of current ratings and target prices for James River Group Holdings and Old Republic International Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
James River Group Holdings 0 1 3 0 2.75
Old Republic International Corporation 0 0 0 1 4.00

James River Group Holdings presently has a consensus price target of $47.00, indicating a potential upside of 13.25%. Old Republic International Corporation has a consensus price target of $25.00, indicating a potential upside of 21.07%. Given Old Republic International Corporation’s stronger consensus rating and higher probable upside, analysts clearly believe Old Republic International Corporation is more favorable than James River Group Holdings.

Valuation & Earnings

This table compares James River Group Holdings and Old Republic International Corporation’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
James River Group Holdings $586.23 million 2.09 $74.47 million $2.28 18.20
Old Republic International Corporation $5.90 billion 0.92 $467.00 million $1.35 15.30

Old Republic International Corporation has higher revenue and earnings than James River Group Holdings. Old Republic International Corporation is trading at a lower price-to-earnings ratio than James River Group Holdings, indicating that it is currently the more affordable of the two stocks.

Summary

James River Group Holdings beats Old Republic International Corporation on 11 of the 17 factors compared between the two stocks.

James River Group Holdings Company Profile

James River Group Holdings, Ltd. (JRG Holdings) is an insurance and reinsurance holding company. The Company operates through four segments: Excess and Surplus Lines, Specialty Admitted Insurance, Casualty Reinsurance, and Corporate and Other. The Excess and Surplus Lines segment offers commercial excess and surplus lines liability and excess property insurance products. The Specialty Admitted Insurance segment offers workers’ compensation insurance coverage, as well as specialty admitted fronting and program business. The Casualty Reinsurance segment offers commercial liability and non-catastrophe property reinsurance to the United States insurance companies and to its the United States-based insurance subsidiaries. The Corporate and Other segment consists of certain management and treasury activities of James River Group, Inc., James River Group Holdings UK Limited and JRG Holdings. It owns six insurance companies focused on specialty insurance niches and a reinsurance company.

Old Republic International Corporation Company Profile

Old Republic International Corporation is a holding company. The Company is engaged in business of insurance underwriting and related services. The Company conducts its operations through various regulated insurance company subsidiaries, which are organized into three segments: General Insurance Group, Title Insurance Group and the Republic Financial Indemnity Group (RFIG) Run-off Business. The Company’s General Insurance segment consists of property and liability insurance, and offers coverages to businesses, government and other institutions. The Company’s Title Insurance Group business consists of the issuance of policies to real estate purchasers and investors based upon searches of the public records, which contain information concerning interests in real property. The Company’s RFIG run-off business consists of its mortgage guaranty and consumer credit indemnity (CCI) operations.

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