Kingstone Companies (NASDAQ: KINS) and Blue Capital Reinsurance (NYSE:BCRH) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, earnings, dividends, analyst recommendations, risk, valuation and institutional ownership.

Dividends

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Kingstone Companies pays an annual dividend of $0.40 per share and has a dividend yield of 2.4%. Blue Capital Reinsurance pays an annual dividend of $0.90 per share and has a dividend yield of 7.4%. Kingstone Companies pays out 42.6% of its earnings in the form of a dividend. Blue Capital Reinsurance pays out -18.2% 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. Blue Capital Reinsurance is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation & Earnings

This table compares Kingstone Companies and Blue Capital Reinsurance’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Kingstone Companies $92.77 million 1.88 $9.98 million $0.94 17.39
Blue Capital Reinsurance $49.40 million 2.15 -$43.20 million ($4.94) -2.45

Kingstone Companies has higher revenue and earnings than Blue Capital Reinsurance. Blue Capital Reinsurance is trading at a lower price-to-earnings ratio than Kingstone Companies, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Kingstone Companies has a beta of 0.92, suggesting that its stock price is 8% less volatile than the S&P 500. Comparatively, Blue Capital Reinsurance has a beta of 0.08, suggesting that its stock price is 92% less volatile than the S&P 500.

Profitability

This table compares Kingstone Companies and Blue Capital Reinsurance’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Kingstone Companies 10.77% 10.83% 4.50%
Blue Capital Reinsurance -87.45% -28.08% -21.31%

Insider and Institutional Ownership

51.7% of Kingstone Companies shares are owned by institutional investors. Comparatively, 43.4% of Blue Capital Reinsurance shares are owned by institutional investors. 10.3% of Kingstone Companies shares are owned by insiders. Comparatively, 0.1% of Blue Capital Reinsurance shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Kingstone Companies and Blue Capital Reinsurance, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kingstone Companies 0 0 1 0 3.00
Blue Capital Reinsurance 1 2 0 0 1.67

Kingstone Companies currently has a consensus price target of $24.00, suggesting a potential upside of 46.79%. Blue Capital Reinsurance has a consensus price target of $18.00, suggesting a potential upside of 48.76%. Given Blue Capital Reinsurance’s higher probable upside, analysts plainly believe Blue Capital Reinsurance is more favorable than Kingstone Companies.

Summary

Kingstone Companies beats Blue Capital Reinsurance on 11 of the 15 factors compared between the two stocks.

Kingstone Companies Company Profile

Kingstone Companies, Inc. offers property and casualty insurance products to small businesses and individuals in New York State. The Company offers these products through its subsidiary, Kingstone Insurance Company (KICO). KICO is a licensed property and casualty insurance company. The Company operates through property and casualty insurances segment, which offers a range of property and casualty policies to its producers. The Company underwrites its business utilizing the CLUE industry claims database, insurance scoring reports, physical inspection of risks and other individual risk underwriting tools. It writes homeowners and dwelling fire business in New York City and Long Island. The Company’s product lines include personal lines, commercial liability, commercial automobile, livery physical damage and other. Its personal lines consist of homeowners, dwelling fire, renters, equipment breakdown and service line endorsements and personal umbrella policies.

Blue Capital Reinsurance Company Profile

Blue Capital Reinsurance Holdings Ltd. provides collateralized reinsurance in the property catastrophe market and invests in various insurance-linked securities. The Company conducts its operations through its subsidiaries, including Blue Capital Re Ltd. (Blue Capital Re), which provides collateralized reinsurance, and Blue Capital Re ILS Ltd. (Blue Capital Re ILS), which conducts hedging and other investment activities. Blue Capital Re provides reinsurance to third-party insurance and reinsurance companies through reinsurance contracts, either directly with the cedant or on a fronted basis. Blue Capital Re ILS may purchase catastrophe bonds to access certain risks. Blue Capital Re or Blue Capital Re ILS may buy and sell industry loss warranties as a way to access certain risks. Blue Capital Re ILS’ portfolio may include over-the-counter or exchange-traded futures or options listed on catastrophe indexes, such as catastrophe or weather derivatives.

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