RLI (NYSE:RLI – Get Free Report) and Sompo (OTCMKTS:SMPNY – Get Free Report) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, dividends, valuation, earnings, risk, analyst recommendations and profitability.
Analyst Ratings
This is a breakdown of recent recommendations and price targets for RLI and Sompo, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| RLI | 2 | 4 | 1 | 0 | 1.86 |
| Sompo | 0 | 1 | 0 | 0 | 2.00 |
RLI currently has a consensus price target of $63.20, suggesting a potential upside of 6.51%. Given RLI’s higher probable upside, analysts plainly believe RLI is more favorable than Sompo.
Dividends
Institutional and Insider Ownership
77.9% of RLI shares are owned by institutional investors. 2.4% of RLI shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Profitability
This table compares RLI and Sompo’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| RLI | 22.22% | 17.61% | 5.03% |
| Sompo | 12.35% | 13.69% | 4.01% |
Valuation and Earnings
This table compares RLI and Sompo”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| RLI | $1.88 billion | 2.89 | $403.34 million | $4.76 | 12.47 |
| Sompo | $35.69 billion | 1.14 | $4.22 billion | $2.54 | 8.56 |
Sompo has higher revenue and earnings than RLI. Sompo is trading at a lower price-to-earnings ratio than RLI, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
RLI has a beta of 0.38, meaning that its share price is 62% less volatile than the S&P 500. Comparatively, Sompo has a beta of 0.29, meaning that its share price is 71% less volatile than the S&P 500.
Summary
RLI beats Sompo on 12 of the 17 factors compared between 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 Sompo
Sompo Holdings, Inc. provides property and casualty (P&C) insurance services in Japan and internationally. The company operates through Domestic P&C Insurance Business, Overseas Insurance Business, Domestic Life Insurance Business, and Nursing Care & Seniors Business segments. It offers various P&C insurance products, including automobile, fire, personal accident, and marine, as well as security, risk management, assistance, and warranty services; and life insurance products. The company also provides nursing care and seniors services; and customer security, health, and wellbeing support services. In addition, it offers asset management services; home remodeling services; and health support services comprising health guidance and employee assistance programs. The company was formerly known as Sompo Japan Nipponkoa Holdings, Inc. and changed its name to Sompo Holdings, Inc. in October 2016. The company was incorporated in 2010 and is headquartered in Tokyo, Japan.
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