RLI (NYSE:RLI) vs. Stewart Information Services (NYSE:STC) Head-To-Head Review

RLI (NYSE:RLI) and Stewart Information Services (NYSE:STC) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their analyst recommendations, profitability, risk, valuation, earnings, institutional ownership and dividends.

Institutional and Insider Ownership

77.9% of RLI shares are owned by institutional investors. Comparatively, 96.9% of Stewart Information Services shares are owned by institutional investors. 2.4% of RLI shares are owned by insiders. Comparatively, 2.9% of Stewart Information Services shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Volatility & Risk

RLI has a beta of 0.52, suggesting that its stock price is 48% less volatile than the S&P 500. Comparatively, Stewart Information Services has a beta of 1.03, suggesting that its stock price is 3% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and recommmendations for RLI and Stewart Information Services, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RLI	0	7	0	1	2.25
Stewart Information Services	0	0	4	0	3.00

RLI presently has a consensus price target of $64.40, suggesting a potential upside of 9.07%. Stewart Information Services has a consensus price target of $80.00, suggesting a potential upside of 18.62%. Given Stewart Information Services’ stronger consensus rating and higher possible upside, analysts clearly believe Stewart Information Services is more favorable than RLI.

Dividends

RLI pays an annual dividend of $0.64 per share and has a dividend yield of 1.1%. Stewart Information Services pays an annual dividend of $2.10 per share and has a dividend yield of 3.1%. RLI pays out 14.7% of its earnings in the form of a dividend. Stewart Information Services pays out 52.0% 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. RLI has increased its dividend for 51 consecutive years and Stewart Information Services has increased its dividend for 4 consecutive years.

Profitability

This table compares RLI and Stewart Information Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
RLI	21.43%	18.67%	5.41%
Stewart Information Services	3.95%	9.32%	4.82%

Earnings and Valuation

This table compares RLI and Stewart Information Services”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RLI	$1.88 billion	2.88	$403.34 million	$4.36	13.54
Stewart Information Services	$2.92 billion	0.70	$115.54 million	$4.04	16.69

RLI has higher earnings, but lower revenue than Stewart Information Services. RLI is trading at a lower price-to-earnings ratio than Stewart Information Services, indicating that it is currently the more affordable of the two stocks.

About RLI

RLI Corp., an insurance holding company, underwrites property and casualty insurance. 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. It also offers coverages for security guards and environmental liability for underground storage tanks, contractors and asbestos, and environmental remediation specialists; and professional liability coverages for errors and omission coverage for small to medium-sized design, technical, computer, and miscellaneous professionals. This segment provides commercial automobile liability and physical damage insurance to local, intermediate and long haul truckers, public transportation entities, and other types of specialty commercial automobile risks; incidental and related insurance coverages; inland marine coverages; management liability coverages, such as directors and officers liability insurance, fiduciary liability and coverages, employment practice liability, and for various classes of risks, including public and private businesses; 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 commercial surety bonds for medium to large-sized businesses; small bonds for businesses and individuals; and bonds for small to medium-sized contractors. The company also engages in various reinsurance coverages. It markets its products through branch offices, wholesale and retail brokers, carrier partners, and underwriting and independent agents. RLI Corp. was incorporated in 1965 and is headquartered in Peoria, Illinois.

About Stewart Information Services

Stewart Information Services Corporation, through its subsidiaries, provides title insurance and real estate transaction related services in the United States and internationally. The company involves in searching, examining, closing, and insuring the condition of the title to real property. It also offers home and personal insurance services; services for tax-deferred exchanges; and digital customer engagement platform services. It also provides appraisal management, online notarization and closing, credit and real estate information, and search and valuation services. The company serves homebuyers and sellers, residential and commercial real estate professionals, mortgage lenders and servicers, title agencies and real estate attorneys, and home builders through direct operations, network of independent agencies, and other businesses. The company was founded in 1893 and is headquartered in Houston, Texas.