Blue Capital Reinsurance (NYSE:BCRH) & American Financial Group (AFG) Head to Head Analysis

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American Financial Group (NYSE:AFG) and Blue Capital Reinsurance (NYSE:BCRH) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, dividends, risk, valuation, profitability and analyst recommendations.

Valuation and Earnings

This table compares American Financial Group and Blue Capital Reinsurance’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
American Financial Group $6.87 billion 1.38 $475.00 million $6.55 16.26
Blue Capital Reinsurance $49.40 million 1.24 -$43.20 million ($4.94) -1.41

American Financial Group has higher revenue and earnings than Blue Capital Reinsurance. Blue Capital Reinsurance is trading at a lower price-to-earnings ratio than American Financial Group, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for American Financial Group and Blue Capital Reinsurance, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American Financial Group 0 1 2 0 2.67
Blue Capital Reinsurance 0 2 0 0 2.00

American Financial Group presently has a consensus target price of $120.50, suggesting a potential upside of 13.16%. Blue Capital Reinsurance has a consensus target price of $11.00, suggesting a potential upside of 57.59%. Given Blue Capital Reinsurance’s higher possible upside, analysts clearly believe Blue Capital Reinsurance is more favorable than American Financial Group.

Dividends

American Financial Group pays an annual dividend of $1.60 per share and has a dividend yield of 1.5%. Blue Capital Reinsurance pays an annual dividend of $1.20 per share and has a dividend yield of 17.2%. American Financial Group pays out 24.4% of its earnings in the form of a dividend. Blue Capital Reinsurance pays out -24.3% 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. American Financial Group has increased its dividend for 12 consecutive years. Blue Capital Reinsurance is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider & Institutional Ownership

62.0% of American Financial Group shares are owned by institutional investors. Comparatively, 46.0% of Blue Capital Reinsurance shares are owned by institutional investors. 14.9% of American Financial Group shares are owned by company insiders. Comparatively, 0.1% of Blue Capital Reinsurance shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Risk & Volatility

American Financial Group has a beta of 0.84, meaning that its stock price is 16% less volatile than the S&P 500. Comparatively, Blue Capital Reinsurance has a beta of 0.29, meaning that its stock price is 71% less volatile than the S&P 500.

Profitability

This table compares American Financial Group and Blue Capital Reinsurance’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
American Financial Group 9.98% 15.37% 1.31%
Blue Capital Reinsurance -11.25% -3.01% -2.15%

Summary

American Financial Group beats Blue Capital Reinsurance on 14 of the 17 factors compared between the two stocks.

American Financial Group Company Profile

American Financial Group, Inc., through its subsidiaries, provides property and casualty insurance products in the United States. The company operates through Property and Casualty Insurance, Annuity, Run-Off Long-Term Care and Life, and Other segments. It offers property and transportation insurance products, such as physical damage and liability coverage for buses, trucks and recreational vehicles, inland and ocean marine, agricultural-related products, and other property coverages; specialty casualty insurance, including primarily excess and surplus, general liability, executive liability, professional liability, umbrella and excess liability, and specialty coverage in targeted markets and customized programs for small to mid-sized businesses; and specialty financial insurance products comprising risk management insurance programs for leasing and financing institutions, surety and fidelity products, and trade credit insurance. The company sells its property and casualty insurance products through independent insurance agents and brokers, as well as through employee agents. It also provides traditional fixed and fixed-indexed annuities to the retail, financial institutions, and education markets; and engages in the commercial real estate operations in Cincinnati, Whitefield, New Hampshire, Chesapeake Bay, Charleston, and Palm Beach. American Financial Group, Inc. was founded in 1872 and is headquartered in Cincinnati, Ohio.

Blue Capital Reinsurance Company Profile

Blue Capital Reinsurance Holdings Ltd., through its subsidiaries, provides collateralized reinsurance in the property catastrophe market in the United States and internationally. It also invests in various insurance-linked securities. The company was founded in 2013 and is headquartered in Pembroke, Bermuda.

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