Skyward Specialty Insurance Group (NASDAQ:SKWD) vs. United Fire Group (NASDAQ:UFCS) Financial Analysis

United Fire Group (NASDAQ:UFCS) and Skyward Specialty Insurance Group (NASDAQ:SKWD) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, risk, profitability, valuation and earnings.

Analyst Ratings

This is a summary of recent recommendations and price targets for United Fire Group and Skyward Specialty Insurance Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
United Fire Group	0	1	1	0	2.50
Skyward Specialty Insurance Group	0	4	7	1	2.75

United Fire Group presently has a consensus target price of $30.00, suggesting a potential upside of 7.64%. Skyward Specialty Insurance Group has a consensus target price of $61.75, suggesting a potential upside of 5.38%. Given United Fire Group’s higher probable upside, equities analysts clearly believe United Fire Group is more favorable than Skyward Specialty Insurance Group.

Institutional and Insider Ownership

62.7% of United Fire Group shares are held by institutional investors. Comparatively, 94.8% of Skyward Specialty Insurance Group shares are held by institutional investors. 6.1% of United Fire Group shares are held by insiders. Comparatively, 8.0% of Skyward Specialty Insurance 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.

Profitability

This table compares United Fire Group and Skyward Specialty Insurance Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
United Fire Group	4.94%	8.84%	1.95%
Skyward Specialty Insurance Group	12.24%	16.39%	3.57%

Risk and Volatility

United Fire Group has a beta of 0.51, meaning that its stock price is 49% less volatile than the S&P 500. Comparatively, Skyward Specialty Insurance Group has a beta of 0.79, meaning that its stock price is 21% less volatile than the S&P 500.

Valuation and Earnings

This table compares United Fire Group and Skyward Specialty Insurance Group”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
United Fire Group	$1.29 billion	0.55	$61.96 million	$2.53	11.02
Skyward Specialty Insurance Group	$1.21 billion	1.95	$85.98 million	$3.00	19.53

Skyward Specialty Insurance Group has lower revenue, but higher earnings than United Fire Group. United Fire Group is trading at a lower price-to-earnings ratio than Skyward Specialty Insurance Group, indicating that it is currently the more affordable of the two stocks.

Summary

Skyward Specialty Insurance Group beats United Fire Group on 13 of the 15 factors compared between the two stocks.

About United Fire Group

United Fire Group, Inc., together with its subsidiaries, provides property and casualty insurance for individuals and businesses in the United States. The company offers commercial and personal lines of property and casualty insurance; and reinsurance coverage for property and casualty insurance. Its commercial lines include fire and allied lines, other liability, automobile, workers’ compensation, fidelity and surety coverage, and other insurance products; and personal lines comprise automobile, and fire and allied lines coverage, including homeowners, as well as provides assumed reinsurance products. The company sells its products through a network of independent agencies. United Fire Group, Inc. was incorporated in 1946 and is headquartered in Cedar Rapids, Iowa.

About Skyward Specialty Insurance Group

Skyward Specialty Insurance Group, Inc., an insurance holding company, underwrites commercial property and casualty insurance products in the United States. It offers general liability, excess liability, professional liability, commercial auto, group accident and health, property, surety, and workers' compensation insurance products. Skyward Specialty Insurance Group, Inc. was incorporated in 2006 and is headquartered in Houston, Texas.