Selective Insurance Group (NASDAQ:SIGI – Get Free Report) and HCI Group (NYSE:HCI – Get Free Report) are both mid-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, risk, earnings, dividends, institutional ownership, profitability and valuation.
Dividends
Selective Insurance Group pays an annual dividend of $1.72 per share and has a dividend yield of 1.7%. HCI Group pays an annual dividend of $1.60 per share and has a dividend yield of 0.9%. Selective Insurance Group pays out 20.7% of its earnings in the form of a dividend. HCI Group pays out 6.5% 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. Selective Insurance Group has increased its dividend for 11 consecutive years. Selective Insurance Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Earnings and Valuation
This table compares Selective Insurance Group and HCI Group”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Selective Insurance Group | $5.34 billion | 1.14 | $466.41 million | $8.32 | 12.42 |
| HCI Group | $980.92 million | 2.38 | $299.01 million | $24.75 | 7.60 |
Selective Insurance Group has higher revenue and earnings than HCI Group. HCI Group is trading at a lower price-to-earnings ratio than Selective Insurance Group, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Selective Insurance Group has a beta of 0.22, indicating that its stock price is 78% less volatile than the S&P 500. Comparatively, HCI Group has a beta of 0.96, indicating that its stock price is 4% less volatile than the S&P 500.
Analyst Recommendations
This is a breakdown of current recommendations and price targets for Selective Insurance Group and HCI Group, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Selective Insurance Group | 1 | 3 | 3 | 0 | 2.29 |
| HCI Group | 0 | 1 | 5 | 1 | 3.00 |
Selective Insurance Group currently has a consensus price target of $101.83, suggesting a potential downside of 1.46%. HCI Group has a consensus price target of $250.00, suggesting a potential upside of 32.94%. Given HCI Group’s stronger consensus rating and higher possible upside, analysts plainly believe HCI Group is more favorable than Selective Insurance Group.
Institutional & Insider Ownership
82.9% of Selective Insurance Group shares are held by institutional investors. Comparatively, 87.0% of HCI Group shares are held by institutional investors. 0.8% of Selective Insurance Group shares are held by insiders. Comparatively, 18.5% of HCI Group shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Profitability
This table compares Selective Insurance Group and HCI Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Selective Insurance Group | 9.40% | 15.60% | 3.41% |
| HCI Group | 33.48% | 28.09% | 12.51% |
Summary
HCI Group beats Selective Insurance Group on 13 of the 18 factors compared between the two stocks.
About Selective Insurance Group
Selective Insurance Group, Inc. is a property and casualty insurance holding company headquartered in Branchville, New Jersey. Founded in 1926, the company provides insurance and related services to businesses and individuals through a network of independent agents. Its offerings include commercial property, general liability, workers’ compensation and commercial auto coverage, as well as personal insurance such as homeowners and auto policies. Selective also provides excess and surplus lines coverage for risks that may not fit standard insurance markets, along with risk management and claims services.
About HCI Group
HCI Group, Inc. is a Florida-based holding company whose primary business is residential property and casualty insurance. Through its insurance subsidiaries, including Homeowners Choice Property & Casualty Insurance Company and TypTap Insurance Company, it offers coverage for homeowners and other residential property owners. The company’s insurance business is centered in Florida, and TypTap has supported its expansion into additional U.S. markets. HCI also has real estate operations and develops technology for use in the insurance industry.
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