Analyzing Amerisafe (NASDAQ:AMSF) and United Insurance (NASDAQ:UIHC)

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Amerisafe (NASDAQ:AMSF) and United Insurance (NASDAQ:UIHC) are both small-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, risk, profitability, institutional ownership, earnings, analyst recommendations and valuation.

Profitability

This table compares Amerisafe and United Insurance’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Amerisafe 20.77% 17.50% 4.95%
United Insurance -4.12% -5.55% -1.21%

Risk and Volatility

Amerisafe has a beta of 0.48, suggesting that its stock price is 52% less volatile than the S&P 500. Comparatively, United Insurance has a beta of 1.17, suggesting that its stock price is 17% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Amerisafe and United Insurance, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Amerisafe 0 1 1 0 2.50
United Insurance 0 1 1 0 2.50

Amerisafe presently has a consensus price target of $81.00, suggesting a potential upside of 21.15%. United Insurance has a consensus price target of $14.00, suggesting a potential upside of 15.42%. Given Amerisafe’s higher possible upside, analysts clearly believe Amerisafe is more favorable than United Insurance.

Dividends

Amerisafe pays an annual dividend of $1.00 per share and has a dividend yield of 1.5%. United Insurance pays an annual dividend of $0.24 per share and has a dividend yield of 2.0%. Amerisafe pays out 25.9% of its earnings in the form of a dividend. United Insurance pays out 63.2% 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.

Institutional & Insider Ownership

35.7% of United Insurance shares are owned by institutional investors. 1.7% of Amerisafe shares are owned by insiders. Comparatively, 52.5% of United Insurance shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Amerisafe and United Insurance’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Amerisafe $377.75 million 3.42 $71.63 million $3.86 17.32
United Insurance $723.94 million 0.72 $290,000.00 $0.38 31.92

Amerisafe has higher earnings, but lower revenue than United Insurance. Amerisafe is trading at a lower price-to-earnings ratio than United Insurance, indicating that it is currently the more affordable of the two stocks.

Summary

Amerisafe beats United Insurance on 8 of the 14 factors compared between the two stocks.

About Amerisafe

AMERISAFE, Inc., an insurance holding company, underwrites workers' compensation insurance in the United States. Its workers' compensation insurance policies provide benefits to injured employees for temporary or permanent disability, death, and medical and hospital expenses. The company provides workers' compensation insurance for small to mid-sized employers engaged in hazardous industries, principally construction, trucking, logging and lumber, manufacturing, agriculture, maritime, and oil and gas. The company was incorporated in 1985 and is based in DeRidder, Louisiana.

About United Insurance

United Insurance Holdings Corp. operates as a property and casualty insurance holding company that sources, writes, and services residential personal and commercial property, and casualty insurance policies in the United States. The company offers structure, content, and liability coverage for standard single-family homeowners, renters, and condominium unit owners, as well as dwelling fire policies. It also provides commercial multi-peril property insurance for residential condominium associations, as well as loss or damage to buildings, inventory, or equipment caused by covered cause of loss, such as fire, wind, hail, water, theft, and vandalism. In addition, the company offers flood, equipment breakdown, and identity theft policies. It markets and distributes its products through a network of independent agencies in Connecticut, Florida, Georgia, Hawaii, Louisiana, Massachusetts, New Jersey, New York, North Carolina, Rhode Island, South Carolina, and Texas. United Insurance Holdings Corp. was founded in 1999 and is headquartered in St. Petersburg, Florida.

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