Heritage Insurance (NYSE: HRTG) and RLI (NYSE:RLI) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their risk, valuation, dividends, analyst recommendations, earnings, profitability and institutional ownership.
This is a summary of current recommendations for Heritage Insurance and RLI, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
This table compares Heritage Insurance and RLI’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Heritage Insurance pays an annual dividend of $0.24 per share and has a dividend yield of 1.4%. RLI pays an annual dividend of $0.84 per share and has a dividend yield of 1.3%. Heritage Insurance pays out -300.0% of its earnings in the form of a dividend. RLI pays out 35.4% 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. Heritage Insurance has increased its dividend for 41 consecutive years. Heritage Insurance is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Volatility & Risk
Heritage Insurance has a beta of 1.27, indicating that its stock price is 27% more volatile than the S&P 500. Comparatively, RLI has a beta of 1.28, indicating that its stock price is 28% more volatile than the S&P 500.
Earnings and Valuation
This table compares Heritage Insurance and RLI’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Heritage Insurance||$406.62 million||1.15||$33.86 million||($0.08)||-219.38|
|RLI||$797.22 million||3.55||$105.02 million||$2.37||27.00|
RLI has higher revenue and earnings than Heritage Insurance. Heritage Insurance is trading at a lower price-to-earnings ratio than RLI, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
82.9% of Heritage Insurance shares are held by institutional investors. Comparatively, 86.0% of RLI shares are held by institutional investors. 16.1% of Heritage Insurance shares are held by company insiders. Comparatively, 6.1% of RLI shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Heritage Insurance beats RLI on 9 of the 17 factors compared between the two stocks.
About Heritage Insurance
Heritage Insurance Holdings, Inc. (Heritage Insurance) is a property and casualty insurance holding company. The Company provides personal and commercial residential insurance. Through its subsidiary, Heritage Property & Casualty Insurance Company (Heritage P&C), it provides personal residential insurance for single-family homeowners and condominium owners, rental property insurance and commercial residential insurance in the state of Florida and North Carolina. The Company is vertically integrated and controls or manages all aspects of insurance underwriting, customer service, actuarial analysis, distribution and claims processing and adjusting. The Company’s primary products are personal and commercial residential insurance, which it offers only in Florida. As of December 31, 2016, it marketed and wrote personal lines voluntary policies through a network of approximately 1,900 independent agents. It had 150,998 voluntary personal residential policies as of December 31, 2016.
RLI Corp. is a specialty insurance company. The Company underwrites selected property and casualty insurance through subsidiaries, as well as offers insurance coverages in both the specialty admitted, and excess and surplus markets. It operates through Casualty, Property and Surety segments. Its Casualty segment consists of commercial and personal umbrella, general liability, commercial transportation, professional services, small commercial, executive products, medical professional liability and other casualty businesses. Its property segment consists of commercial property, marine, specialty personal, property reinsurance and crop reinsurance businesses. Its surety segment consists of miscellaneous, commercial, contract and energy businesses. The Company conducts its operations principally through three insurance companies: RLI Insurance Company (RLI Ins.), Mt. Hawley Insurance Company (Mt. Hawley) and Contractors Bonding and Insurance Company (CBIC).
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