Financial Analysis: National Security Group (NSEC) and Voya Financial (VOYA)

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National Security Group (NASDAQ:NSEC) and Voya Financial (NYSE:VOYA) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, profitability, dividends, analyst recommendations, valuation, institutional ownership and risk.

Institutional & Insider Ownership

3.6% of National Security Group shares are owned by institutional investors. 37.9% of National Security Group shares are owned by company insiders. Comparatively, 0.4% of Voya Financial shares are owned 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.

Profitability

This table compares National Security Group and Voya Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
National Security Group 1.60% 3.92% 1.25%
Voya Financial -28.31% 7.01% 0.36%

Volatility & Risk

National Security Group has a beta of 0.42, suggesting that its share price is 58% less volatile than the S&P 500. Comparatively, Voya Financial has a beta of 1.45, suggesting that its share price is 45% more volatile than the S&P 500.

Dividends

National Security Group pays an annual dividend of $0.20 per share and has a dividend yield of 1.6%. Voya Financial pays an annual dividend of $0.04 per share and has a dividend yield of 0.1%. Voya Financial pays out 1.3% of its earnings in the form of a dividend. National Security Group has increased its dividend for 2 consecutive years. National Security Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of recent ratings and price targets for National Security Group and Voya Financial, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
National Security Group 0 0 0 0 N/A
Voya Financial 0 3 11 0 2.79

Voya Financial has a consensus target price of $59.08, suggesting a potential upside of 29.47%. Given Voya Financial’s higher possible upside, analysts clearly believe Voya Financial is more favorable than National Security Group.

Earnings and Valuation

This table compares National Security Group and Voya Financial’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
National Security Group $65.64 million 0.49 -$1.20 million N/A N/A
Voya Financial $8.62 billion 0.82 -$2.99 billion $3.01 15.16

National Security Group has higher earnings, but lower revenue than Voya Financial.

Summary

National Security Group beats Voya Financial on 9 of the 15 factors compared between the two stocks.

About National Security Group

The National Security Group, Inc., an insurance holding company, provides insurance products and services in the United States. The company operates through two segments, Property and Casualty Insurance, and Life Insurance. Its Property and Casualty Insurance segment primarily underwrites home insurance coverage with primary lines of business consisting of dwelling fire and extended coverage, mobile homeowners, and other liability insurance services in Alabama, Arkansas, Florida, Georgia, Kentucky, Mississippi, Oklahoma, South Carolina, Tennessee, and West Virginia, as well as operates on a surplus lines basis in the state of Louisiana. The company's Life Insurance segment offers ordinary life, accident and health, supplemental hospital, and cancer insurance products in Alabama, Florida, Georgia, Mississippi, South Carolina, Tennessee, and Texas. It distributes its products through independent agents, home service agents, and brokers. The National Security Group, Inc. was founded in 1947 and is based in Elba, Alabama.

About Voya Financial

Voya Financial, Inc. operates as a retirement, investment, and insurance company in the United States. It operates through Retirement, Investment Management, Individual Life, and Employee Benefits segments. The Retirement segment offers tax-deferred employer-sponsored retirement savings plans and administrative services; and individual account rollover plans and other retail financial products, as well as financial planning and advisory services. This segment serves corporate, education, healthcare, and other non-profit and government entities, as well as institutional and individual customers through third-party administrators, wirehouse affiliated brokers, registered investment advisors, independent sales agents, and consulting firms. The Investment Management segment provides fixed income, equity, multi-asset, and alternative products and solutions to individual and institutional customers directly, as well as through consultant channel, banks, broker-dealers, and independent financial advisers. The Individual Life segment provides wealth protection and transfer opportunities through universal, variable, and term life products. The Employee Benefits segment offers stop loss, group life, voluntary employee-paid, and disability products through consultants, brokers, third-party administrators, enrollment firms, and technology partners. The company was formerly known as ING U.S., Inc. and changed its name to Voya Financial, Inc. in April 2014. Voya Financial, Inc. was incorporated in 1999 and is based in New York, New York.

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