Reviewing Investors Title (NASDAQ:ITIC) & Selective Insurance Group (NASDAQ:SIGI)

Selective Insurance Group (NASDAQ:SIGI) and Investors Title (NASDAQ:ITIC) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, earnings, risk, dividends, valuation, analyst recommendations and profitability.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Selective Insurance Group	8.74%	14.23%	3.13%
Investors Title	13.15%	13.72%	10.47%

Risk and Volatility

Selective Insurance Group has a beta of 0.23, suggesting that its stock price is 77% less volatile than the S&P 500. Comparatively, Investors Title has a beta of 0.65, suggesting that its stock price is 35% less volatile than the S&P 500.

Valuation and Earnings

This table compares Selective Insurance Group and Investors Title”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	1.02	$466.40 million	$7.49	12.03
Investors Title	$273.87 million	1.93	$31.07 million	$19.01	14.69

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

Dividends

Selective Insurance Group pays an annual dividend of $1.72 per share and has a dividend yield of 1.9%. Investors Title pays an annual dividend of $1.84 per share and has a dividend yield of 0.7%. Selective Insurance Group pays out 23.0% of its earnings in the form of a dividend. Investors Title pays out 9.7% 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.

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Selective Insurance Group	1	5	1	0	2.00
Investors Title	0	0	1	0	3.00

Selective Insurance Group currently has a consensus price target of $83.00, suggesting a potential downside of 7.88%. Given Selective Insurance Group’s higher possible upside, equities analysts clearly believe Selective Insurance Group is more favorable than Investors Title.

Institutional & Insider Ownership

82.9% of Selective Insurance Group shares are held by institutional investors. Comparatively, 41.4% of Investors Title shares are held by institutional investors. 1.5% of Selective Insurance Group shares are held by insiders. Comparatively, 26.4% of Investors Title shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

Investors Title beats Selective Insurance Group on 9 of the 16 factors compared between the two stocks.

About Selective Insurance Group

Selective Insurance Group, Inc., together with its subsidiaries, provides insurance products and services in the United States. The company operates through four segments: Standard Commercial Lines, Standard Personal Lines, E&S Lines, and Investments. It offers casualty insurance products that covers the financial consequences of employee injuries in the course of employment and bodily injury and/or property damage to a third party; property insurance products, which covers the accidental loss of an insured's real property, personal property, and/or earnings due to the property's loss; and flood insurance products. The company also invests in fixed income investments and commercial mortgage loans, as well as equity securities, short-term investments, and alternative investments, and other investments. It offers its insurance products and services to businesses, non-profit organizations, local government agencies, and individuals through independent retail agents and wholesale general agents. The company was founded in 1926 and is headquartered in Branchville, New Jersey.

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.