Allied World Assurance (OTCMKTS: AWHHF) and National Interstate (NASDAQ:NATL) are both companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, risk, earnings, institutional ownership, analyst recommendations, profitability and dividends.
Institutional and Insider Ownership
86.5% of Allied World Assurance shares are held by institutional investors. Comparatively, 84.9% of National Interstate shares are held by institutional investors. 3.2% of Allied World Assurance shares are held by insiders. Comparatively, 11.8% of National Interstate shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
This table compares Allied World Assurance and National Interstate’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Allied World Assurance||12.56%||8.96%||2.42%|
Allied World Assurance pays an annual dividend of $0.52 per share and has a dividend yield of 1.0%. National Interstate pays an annual dividend of $0.56 per share. Allied World Assurance pays out 17.5% of its earnings in the form of a dividend. National Interstate pays out 40.6% 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. Allied World Assurance is clearly the better dividend stock, given its higher yield and lower payout ratio.
Earnings & Valuation
This table compares Allied World Assurance and National Interstate’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Allied World Assurance||N/A||N/A||N/A||$2.97||17.36|
National Interstate is trading at a lower price-to-earnings ratio than Allied World Assurance, indicating that it is currently the more affordable of the two stocks.
This is a summary of current recommendations and price targets for Allied World Assurance and National Interstate, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Allied World Assurance||0||1||0||0||2.00|
Allied World Assurance currently has a consensus target price of $24.50, suggesting a potential downside of 52.47%.
Allied World Assurance beats National Interstate on 6 of the 9 factors compared between the two stocks.
About Allied World Assurance
Allied World Assurance Company Holdings Ltd is a Germany-based holding company. It provides property, casualty and specialty insurance and reinsurance solutions to clients around the world. The Company operates in three segments: North American Insurance, Global Markets Insurance and Reinsurance. The North American Insurance segment consists of the Company’s direct insurance operations in the United States, Bermuda and Canada. The Global Markets Insurance segment includes all of the Company’s direct insurance operations outside of North America. The Company’s reinsurance segment includes the reinsurance of property, general casualty, professional liability, specialty lines and property catastrophe coverage’s written by other reinsurance companies. The Company leases space in Australia, Bermuda, Canada, Hong Kong, Ireland, Labuan, Singapore, the United Kingdom and the United States for the operation of its North American Insurance, Global Markets Insurance and Reinsurance segments.
About National Interstate
National Interstate Corporation and its subsidiaries operate as an insurance holding company that underwrites and sells traditional and alternative property and casualty insurance products to the passenger transportation, trucking and moving and storage industries, general commercial insurance to small businesses in Hawaii and Alaska and personal insurance to owners of recreational vehicles throughout the United States. The Company is a specialty property and casualty insurance company with a focus on the transportation industry. The Company operates through property and casualty insurance segment. The Company offers approximately 40 product lines in the specialty property and casualty insurance market, which it groups into approximately four general business components: alternative risk transfer (ART), transportation, specialty personal lines, and Hawaii and Alaska based on the class of business, insureds’ risk participation or geographic location.
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