Safety Insurance Group (NASDAQ:SAFT) and Universal Insurance (NYSE:UVE) Head to Head Analysis

Universal Insurance (NYSE:UVEGet Rating) and Safety Insurance Group (NASDAQ:SAFTGet Rating) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, earnings, analyst recommendations, dividends, valuation, profitability and institutional ownership.

Dividends

Universal Insurance pays an annual dividend of $0.64 per share and has a dividend yield of 5.4%. Safety Insurance Group pays an annual dividend of $3.60 per share and has a dividend yield of 4.2%. Universal Insurance pays out -20.6% of its earnings in the form of a dividend. Safety Insurance Group pays out 99.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Universal Insurance is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a breakdown of current recommendations for Universal Insurance and Safety Insurance Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Universal Insurance 0 1 0 0 2.00
Safety Insurance Group 0 0 0 0 N/A

Universal Insurance presently has a consensus price target of $11.00, indicating a potential downside of 7.25%. Given Universal Insurance’s higher probable upside, analysts plainly believe Universal Insurance is more favorable than Safety Insurance Group.

Institutional & Insider Ownership

66.9% of Universal Insurance shares are owned by institutional investors. Comparatively, 91.8% of Safety Insurance Group shares are owned by institutional investors. 16.1% of Universal Insurance shares are owned by company insiders. Comparatively, 4.2% of Safety Insurance Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Universal Insurance and Safety Insurance Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Universal Insurance -8.06% -22.70% -3.54%
Safety Insurance Group 6.77% 9.79% 4.16%

Risk and Volatility

Universal Insurance has a beta of 0.96, suggesting that its share price is 4% less volatile than the S&P 500. Comparatively, Safety Insurance Group has a beta of 0.3, suggesting that its share price is 70% less volatile than the S&P 500.

Valuation and Earnings

This table compares Universal Insurance and Safety Insurance Group’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Universal Insurance $1.12 billion 0.32 $20.41 million ($3.10) -3.83
Safety Insurance Group $884.91 million 1.43 $130.71 million $3.62 23.69

Safety Insurance Group has lower revenue, but higher earnings than Universal Insurance. Universal Insurance is trading at a lower price-to-earnings ratio than Safety Insurance Group, indicating that it is currently the more affordable of the two stocks.

Summary

Safety Insurance Group beats Universal Insurance on 8 of the 14 factors compared between the two stocks.

About Universal Insurance

(Get Rating)

Universal Insurance Holdings, Inc., together with its subsidiaries, operates as an integrated insurance holding company in the United States. The company develops, markets, and underwrites insurance products for personal residential insurance, such as homeowners, renters/tenants, condo unit owners, and dwelling/fire; and offers allied lines, coverage for other structures, and personal property, liability, and personal articles coverages. It also advises on actuarial issues, oversees distribution, administers claims payments, performs policy administration and underwriting, and assists with reinsurance negotiations; places and manages reinsurance programs for the insurance entities; and operates Clovered.com, an online platform in which consumers receive side-by-side quotes from various carriers across multiple states, as well as educational materials about homeowners' insurance policies. It offers its products through a network of independent agents, as well as Universal Direct, a direct-to-consumer online platform, which enables homeowners to directly purchase, pay for, and bind homeowners' policies. The company was formerly known as Universal Heights, Inc. and changed its name to Universal Insurance Holdings, Inc. in January 2001. Universal Insurance Holdings, Inc. was incorporated in 1990 and is headquartered in Fort Lauderdale, Florida.

About Safety Insurance Group

(Get Rating)

Safety Insurance Group, Inc. provides private passenger and commercial automobile, and homeowner insurance in the United States. The company's private passenger automobile policies offer coverage for bodily injury and property damage to others, no-fault personal injury coverage for the insured/insured's car occupants, and physical damage coverage for an insured's own vehicle for collision or other perils. It also provides commercial automobile policies that offer insurance for commercial vehicles used for business purposes, including private passenger-type vehicles, trucks, tractors and trailers, insure individual vehicles, and commercial fleets; and homeowners policies, which provide coverage for homes, condominiums, and apartments for losses to a dwelling and its contents from various perils, and coverage for liability to others arising from ownership or occupancy. In addition, the company offers business owners policies that cover apartments and residential condominiums, restaurants, office condominiums, processing and services businesses, special trade contractors, and wholesalers. Further, it provides personal umbrella policies, which provide personal excess liability coverage over and above the limits of individual automobile, watercraft, and homeowner's insurance policies; and commercial umbrella and business owner policies, as well as underwrites dwelling fire insurance for non-owner-occupied residences. Additionally, the company offers inland marine coverage for homeowners and business owner policies, and watercraft coverage for small and medium sized pleasure crafts. It distributes its products through independent agents. The company was formerly known as Safety Holdings Inc and changed its name to Safety Insurance Group, Inc. in April 2002. Safety Insurance Group, Inc. was founded in 1979 and is headquartered in Boston, Massachusetts.

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