Ryan Specialty (NYSE:RYAN – Get Free Report) and RLI (NYSE:RLI – Get Free Report) are both mid-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, valuation, dividends, profitability, earnings, analyst recommendations and risk.
Institutional and Insider Ownership
84.8% of Ryan Specialty shares are held by institutional investors. Comparatively, 77.9% of RLI shares are held by institutional investors. 52.0% of Ryan Specialty shares are held by company insiders. Comparatively, 2.4% of RLI shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Risk and Volatility
Ryan Specialty has a beta of 0.61, meaning that its stock price is 39% less volatile than the S&P 500. Comparatively, RLI has a beta of 0.36, meaning that its stock price is 64% less volatile than the S&P 500.
Analyst Ratings
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Ryan Specialty | 1 | 10 | 8 | 0 | 2.37 |
| RLI | 2 | 3 | 1 | 0 | 1.83 |
Ryan Specialty presently has a consensus target price of $52.32, indicating a potential upside of 38.61%. RLI has a consensus target price of $63.20, indicating a potential upside of 12.31%. Given Ryan Specialty’s stronger consensus rating and higher probable upside, analysts plainly believe Ryan Specialty is more favorable than RLI.
Profitability
This table compares Ryan Specialty and RLI’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Ryan Specialty | 7.55% | 43.97% | 4.78% |
| RLI | 22.22% | 17.61% | 5.03% |
Dividends
Ryan Specialty pays an annual dividend of $0.52 per share and has a dividend yield of 1.4%. RLI pays an annual dividend of $0.72 per share and has a dividend yield of 1.3%. Ryan Specialty pays out 72.2% of its earnings in the form of a dividend. RLI pays out 15.1% 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. Ryan Specialty has raised its dividend for 1 consecutive years and RLI has raised its dividend for 51 consecutive years.
Earnings and Valuation
This table compares Ryan Specialty and RLI”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Ryan Specialty | $3.05 billion | 3.17 | $63.40 million | $0.72 | 52.43 |
| RLI | $1.88 billion | 2.74 | $403.34 million | $4.76 | 11.82 |
RLI has lower revenue, but higher earnings than Ryan Specialty. RLI is trading at a lower price-to-earnings ratio than Ryan Specialty, indicating that it is currently the more affordable of the two stocks.
Summary
Ryan Specialty beats RLI on 11 of the 17 factors compared between the two stocks.
About Ryan Specialty
Ryan Specialty Holdings, Inc. operates as a service provider of specialty products and solutions for insurance brokers, agents, and carriers in the United States, Canada, the United Kingdom, Europe, and Singapore. It offers distribution, underwriting, product development, administration, and risk management services by acting as a wholesale broker and a managing underwriter. The company serves commercial, industrial, institutional, and government sectors. Ryan Specialty Holdings, Inc. was founded in 2010 and is headquartered in Chicago, Illinois.
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.
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