RLI (NYSE:RLI) and Protective Insurance (NASDAQ:PTVCB) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, valuation, profitability, analyst recommendations, dividends, institutional ownership and risk.

Risk and Volatility

RLI has a beta of 0.93, suggesting that its stock price is 7% less volatile than the S&P 500. Comparatively, Protective Insurance has a beta of 0.79, suggesting that its stock price is 21% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations and price targets for RLI and Protective Insurance, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
RLI 1 3 0 0 1.75
Protective Insurance 0 0 0 0 N/A

RLI presently has a consensus price target of $59.00, suggesting a potential downside of 16.85%. Given RLI’s higher probable upside, equities analysts plainly believe RLI is more favorable than Protective Insurance.

Dividends

RLI pays an annual dividend of $0.88 per share and has a dividend yield of 1.2%. Protective Insurance pays an annual dividend of $0.40 per share and has a dividend yield of 2.1%. RLI pays out 42.9% of its earnings in the form of a dividend. RLI has increased its dividend for 42 consecutive years.

Profitability

This table compares RLI and Protective Insurance’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
RLI 7.84% 10.96% 3.05%
Protective Insurance -7.80% -3.67% -1.01%

Institutional and Insider Ownership

89.3% of RLI shares are owned by institutional investors. Comparatively, 48.7% of Protective Insurance shares are owned by institutional investors. 5.5% of RLI shares are owned by insiders. Comparatively, 38.1% of Protective Insurance shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares RLI and Protective Insurance’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
RLI $818.12 million 3.86 $64.18 million $2.05 34.61
Protective Insurance $439.17 million 0.64 -$34.08 million N/A N/A

RLI has higher revenue and earnings than Protective Insurance.

Summary

RLI beats Protective Insurance on 10 of the 13 factors compared between the two stocks.

About RLI

RLI Corp., an insurance holding company, underwrites property and casualty insurance in the United States and internationally. Its Casualty segment provides commercial and personal coverage products; and general liability products, such as coverage for third-party liability of commercial insureds, including manufacturers, contractors, apartments, and mercantile. This segment also offers coverages for security guards and in the areas of onshore energy-related businesses and environmental liability for underground storage tanks, contractors and asbestos, and environmental remediation specialists; and professional liability coverages focuses on providing errors and omission coverage to small to medium-sized design, technical, computer, and miscellaneous professionals. In addition, this segment provides commercial automobile liability and physical damage insurance to local, intermediate and long haul truckers, public transportation entities, and equipment dealers; incidental and related insurance coverages; inland marine coverages; management liability coverages, such as directors and officers liability insurance, fiduciary liability and fidelity coverages, and for low to moderate classes of risks, including public and private businesses; and healthcare liability and home business insurance products. The company's Property segment offers commercial property, cargo, hull, protection and indemnity, marine liability, inland marine, homeowners' and dwelling fire, and other property insurance products. Its Surety segment offers small bonds for businesses and individuals; bonds for small to medium-sized contractors; commercial surety bonds for medium-to-large businesses; and commercial surety bonds for the energy, petrochemical, and refining industries. The company also underwrites various reinsurance coverages. The company markets its products through branch offices and independent agents. RLI Corp. was founded in 1965 and is headquartered in Peoria, Illinois.

About Protective Insurance

Protective Insurance Corporation, through its subsidiaries, engages in marketing and underwriting property and casualty insurance products. The company offers a range of fleet transportation insurance products, including commercial motor vehicle liability, physical damage, and general liability insurance; workers compensation insurance; medical and indemnity insurance products; non-trucking motor vehicle liability insurance; fidelity and surety bonds; and inland marine products consisting of cargo insurance. It also provides various additional services, such as risk surveys and analyses, safety program design and monitoring, government compliance assistance, loss control, and cost studies; research, development, and consultation in connection with new insurance programs that comprise development of systems to assist customers in monitoring their accident data; and claims handling services to clients with self-insurance programs. It serves trucking and public transportation fleets, as well as independent contractors in the trucking industry. The company primarily operates in the United States, Canada, Bermuda, and Puerto Rico. Protective Insurance Corporation was founded in 1930 and is headquartered in Carmel, Indiana.

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