Critical Analysis: United Insurance (UIHC) versus Blue Capital Reinsurance (BCRH)

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

Risk and Volatility

United Insurance has a beta of 1.37, meaning that its share price is 37% more volatile than the S&P 500. Comparatively, Blue Capital Reinsurance has a beta of 0.68, meaning that its share price is 32% less volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
United Insurance 0.18% 0.49% 0.12%
Blue Capital Reinsurance -80.06% -25.86% -17.13%

Insider and Institutional Ownership

35.8% of United Insurance shares are owned by institutional investors. Comparatively, 40.5% of Blue Capital Reinsurance shares are owned by institutional investors. 52.5% of United Insurance 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 will outperform the market over the long term.

Earnings and Valuation

This table compares United Insurance and Blue Capital Reinsurance’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
United Insurance $723.94 million 0.85 $290,000.00 $0.38 37.58
Blue Capital Reinsurance $35.40 million 1.76 -$28.60 million ($3.27) -2.17

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

Dividends

United Insurance pays an annual dividend of $0.24 per share and has a dividend yield of 1.7%. Blue Capital Reinsurance pays an annual dividend of $0.60 per share and has a dividend yield of 8.5%. United Insurance pays out 63.2% of its earnings in the form of a dividend. Blue Capital Reinsurance pays out -18.3% 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. Blue Capital Reinsurance is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a summary of current ratings and price targets for United Insurance and Blue Capital Reinsurance, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
United Insurance 0 2 0 0 2.00
Blue Capital Reinsurance 0 1 0 0 2.00

United Insurance currently has a consensus target price of $17.50, indicating a potential upside of 22.55%. Blue Capital Reinsurance has a consensus target price of $11.00, indicating a potential upside of 54.97%. Given Blue Capital Reinsurance’s higher probable upside, analysts plainly believe Blue Capital Reinsurance is more favorable than United Insurance.

Summary

United Insurance beats Blue Capital Reinsurance on 9 of the 14 factors compared between the two stocks.

United Insurance Company Profile

United Insurance Holdings Corp. operates as a property and casualty insurance holding company that sources, writes, and services residential personal and commercial property, and casualty insurance policies in the United States. The company offers structure, content, and liability coverage for standard single-family homeowners, renters, and condominium unit owners, as well as dwelling fire policies. It also provides commercial multi-peril property insurance for residential condominium associations, as well as loss or damage to buildings, inventory, or equipment caused by covered cause of loss, such as fire, wind, hail, water, theft, and vandalism. In addition, the company offers flood, equipment breakdown, and identity theft policies. It markets and distributes its products through a network of independent agencies in Connecticut, Florida, Georgia, Hawaii, Louisiana, Massachusetts, New Jersey, New York, North Carolina, Rhode Island, South Carolina, and Texas. United Insurance Holdings Corp. was founded in 1999 and is headquartered in St. Petersburg, Florida.

Blue Capital Reinsurance Company Profile

Blue Capital Reinsurance Holdings Ltd., through its subsidiaries, provides collateralized reinsurance in the property catastrophe market in the United States and internationally. It also invests in various insurance-linked securities. The company was founded in 2013 and is headquartered in Pembroke, Bermuda.

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