RLI (NYSE:RLI – Get Free Report) and Octave Specialty Group (NYSE:OSG – Get Free Report) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, earnings, valuation, risk, analyst recommendations, profitability and institutional ownership.
Earnings & Valuation
This table compares RLI and Octave Specialty Group”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| RLI | $1.90 billion | 2.61 | $403.34 million | $4.28 | 12.57 |
| Octave Specialty Group | $251.22 million | 1.04 | -$261.69 million | ($4.86) | -1.19 |
Analyst Ratings
This is a summary of current ratings and price targets for RLI and Octave Specialty Group, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| RLI | 1 | 5 | 0 | 1 | 2.14 |
| Octave Specialty Group | 1 | 1 | 1 | 1 | 2.50 |
RLI currently has a consensus target price of $61.50, indicating a potential upside of 14.28%. Octave Specialty Group has a consensus target price of $15.00, indicating a potential upside of 158.84%. Given Octave Specialty Group’s stronger consensus rating and higher probable upside, analysts plainly believe Octave Specialty Group is more favorable than RLI.
Institutional & Insider Ownership
77.9% of RLI shares are held by institutional investors. Comparatively, 80.9% of Octave Specialty Group shares are held by institutional investors. 2.4% of RLI shares are held by insiders. Comparatively, 7.2% of Octave Specialty Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Profitability
This table compares RLI and Octave Specialty Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| RLI | 20.81% | 17.72% | 5.13% |
| Octave Specialty Group | -75.91% | -0.55% | -0.13% |
Volatility and Risk
RLI has a beta of 0.41, indicating that its share price is 59% less volatile than the S&P 500. Comparatively, Octave Specialty Group has a beta of 0.86, indicating that its share price is 14% less volatile than the S&P 500.
Summary
RLI beats Octave Specialty Group on 8 of the 14 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 Octave Specialty Group
Ambac Financial Group, Inc. operates as a financial services holding company. It operates three businesses: Specialty Property and Casualty Insurance, Insurance Distribution, and Legacy Financial Guarantee (LFG) Insurance. The Specialty Property and Casualty Insurance business provides specialty property and casualty program insurance with a focus commercial and personal liability risks. The Insurance Distribution business includes the specialty property and casualty insurance distribution business, which includes managing general agents and underwriters, insurance wholesalers, brokers, and other distribution businesses. The LFG Insurance business offers financial guarantee insurance policies that provide an unconditional and irrevocable guarantee, which protects the holder of a debt obligation against non-payment when due of the principal and interest on the obligations guaranteed. Ambac Financial Group, Inc. was incorporated in 1991 and is headquartered in New York, New York.
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