Contrasting Investors Title (NASDAQ:ITIC) & ProAssurance (NYSE:PRA)

Investors Title (NASDAQ:ITIC) and ProAssurance (NYSE:PRA) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their dividends, risk, analyst recommendations, earnings, profitability, institutional ownership and valuation.

Earnings and Valuation

This table compares Investors Title and ProAssurance”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Investors Title	$270.09 million	1.75	$31.07 million	$17.48	14.35
ProAssurance	$1.10 billion	1.11	$52.74 million	$0.94	25.29

ProAssurance has higher revenue and earnings than Investors Title. Investors Title is trading at a lower price-to-earnings ratio than ProAssurance, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent recommendations for Investors Title and ProAssurance, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Investors Title	0	0	0	0	0.00
ProAssurance	1	5	0	0	1.83

ProAssurance has a consensus target price of $21.50, indicating a potential downside of 9.57%. Given ProAssurance’s stronger consensus rating and higher possible upside, analysts plainly believe ProAssurance is more favorable than Investors Title.

Volatility & Risk

Investors Title has a beta of 0.87, suggesting that its share price is 13% less volatile than the S&P 500. Comparatively, ProAssurance has a beta of 0.12, suggesting that its share price is 88% less volatile than the S&P 500.

Insider & Institutional Ownership

41.4% of Investors Title shares are held by institutional investors. Comparatively, 85.6% of ProAssurance shares are held by institutional investors. 26.4% of Investors Title shares are held by insiders. Comparatively, 1.2% of ProAssurance shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Dividends

Investors Title pays an annual dividend of $1.84 per share and has a dividend yield of 0.7%. ProAssurance pays an annual dividend of $0.20 per share and has a dividend yield of 0.8%. Investors Title pays out 10.5% of its earnings in the form of a dividend. ProAssurance pays out 21.3% 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.

Profitability

This table compares Investors Title and ProAssurance’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Investors Title	12.28%	12.70%	9.71%
ProAssurance	4.33%	5.62%	1.24%

Summary

Investors Title beats ProAssurance on 8 of the 15 factors compared between the two stocks.

About Investors Title

Investors Title Company engages in the issuance of residential and commercial title insurance for residential, institutional, commercial, and industrial properties. The company underwrites land title insurance for owners and mortgagees as a primary insurer; and assumes the reinsurance of title insurance risks from other title insurance companies. It offers services in connection with tax-deferred exchanges of like-kind property; acts as a qualified intermediary in tax-deferred exchanges of property; coordinates the exchange aspects of the real estate transaction, such as drafting standard exchange documents, holding the exchange funds between the sale of the old property and the purchase of the new property, and accepting the formal identification of the replacement property. In addition, it serves as an exchange accommodation titleholder for accomplishing reverse exchanges when the taxpayers decide to acquire replacement property before selling the relinquished property. Further, the company offers investment management and trust services to individuals, companies, banks, and trusts; and consulting and management services to clients to start and operate a title insurance agency. It issues title insurance policies directly and through a network of agents in 22 states and the District of Columbia, primarily in the eastern half of the United States. Investors Title Company was founded in 1972 and is headquartered in Chapel Hill, North Carolina.

About ProAssurance

ProAssurance Corporation, through its subsidiaries, provides property and casualty insurance, and reinsurance products in the United States. The company operates through Specialty Property and Casualty, Workers’ Compensation Insurance, and Segregated Portfolio Cell Reinsurance segments. It offers professional liability insurance to healthcare providers and institutions, and attorneys and their firms; medical technology liability insurance to medical technology and life sciences companies; and custom alternative risk solutions, including assumed reinsurance, loss portfolio transfers, and captive cell programs for healthcare professional liability insureds. The company also provides workers’ compensation insurance products, such as guaranteed cost policies, policyholder dividend policies, retrospectively rated policies, and deductible policies, as well as alternative market solutions that include program design, fronting, claims administration, risk management, SPC rental, asset management, and SPC management services for individual companies, agencies, groups, and associations. The company also participates in Syndicate 1729 at Lloyd’s of London for underwriting. It markets its products through independent agencies and brokers, as well as an internal business development team. The company was founded in 1976 and is headquartered in Birmingham, Alabama.