Travelers Companies (NYSE:TRV) and Sanlam (OTCMKTS:SLLDY) Critical Survey

Sanlam (OTCMKTS:SLLDY) and Travelers Companies (NYSE:TRV) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, dividends, earnings, risk, valuation and profitability.

Analyst Ratings

This is a breakdown of current recommendations for Sanlam and Travelers Companies, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sanlam	1	0	0	0	1.00
Travelers Companies	5	13	4	4	2.27

Travelers Companies has a consensus target price of $354.26, indicating a potential downside of 2.63%. Given Travelers Companies’ stronger consensus rating and higher probable upside, analysts plainly believe Travelers Companies is more favorable than Sanlam.

Insider and Institutional Ownership

0.1% of Sanlam shares are held by institutional investors. Comparatively, 82.5% of Travelers Companies shares are held by institutional investors. 1.4% of Travelers Companies shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Sanlam and Travelers Companies”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sanlam	N/A	N/A	N/A	C$9.06	1.17
Travelers Companies	$48.83 billion	1.55	$6.29 billion	$37.34	9.74

Travelers Companies has higher revenue and earnings than Sanlam. Sanlam is trading at a lower price-to-earnings ratio than Travelers Companies, indicating that it is currently the more affordable of the two stocks.

Dividends

Sanlam pays an annual dividend of C$0.42 per share and has a dividend yield of 4.0%. Travelers Companies pays an annual dividend of $5.00 per share and has a dividend yield of 1.4%. Sanlam pays out 4.6% of its earnings in the form of a dividend. Travelers Companies pays out 13.4% 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. Travelers Companies has raised its dividend for 21 consecutive years. Sanlam is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Sanlam and Travelers Companies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sanlam	N/A	N/A	N/A
Travelers Companies	16.95%	25.41%	5.75%

Summary

Travelers Companies beats Sanlam on 13 of the 15 factors compared between the two stocks.

About Sanlam

Sanlam Limited provides various financial solutions to individual, business, and institutional clients in South Africa, rest of Africa, and internationally. The company operates through Sanlam Life and Savings, Sanlam Emerging Markets, Sanlam Investment Group, and Santam segments. It offers life, disability, severe illness, income protection, cancer, funeral, credit life, medical aid, gap cover, vehicle, house contents, buildings, all risk, buy and sell, business debt, key person, and group risk benefits insurance, as well as commercial insurance products consisting of office contents, theft, glass, personal accident, goods in transit, machinery breakdown, fire, business interruption, money, deterioration of stock, accidental damage, public liability, and electronic equipment. The company also provides financial planning and consulting solutions, as well as assistance on wills, trusts, and estates; retirement products; investment management solutions, such as unit trusts, investing for growth, international investments, education planning, sharetrading, and tax free savings; wealth management products; personal and home loans; credit cards; and online solutions. In addition, it provides payment and debit cards order collection; risk management solutions for businesses comprising asset protection, credit loan cover, debit loan cover, and business overhead protection; employee health and retirement plans; and business continuity services. Sanlam Limited was founded in 1918 and is headquartered in Bellville, South Africa.

About Travelers Companies

The Travelers Companies, Inc., through its subsidiaries, provides a range of commercial and personal property, and casualty insurance products and services to businesses, government units, associations, and individuals in the United States and internationally. The company operates through three segments: Business Insurance, Bond & Specialty Insurance, and Personal Insurance. The Business Insurance segment offers workers’ compensation, commercial automobile and property, general liability, commercial multi-peril, employers’ liability, public and product liability, professional indemnity, marine, aviation, onshore and offshore energy, construction, terrorism, personal accident, and kidnap and ransom insurance products. This segment operates through select accounts, which serve small businesses; commercial accounts that serve mid-sized businesses; national accounts, which serve large companies; and national property and other that serve large and mid-sized customers, commercial trucking industry, and agricultural businesses, as well as markets and distributes its products through brokers, wholesale agents, and program managers. The Bond & Specialty Insurance segment provides surety, fidelity, management and professional liability, and other property and casualty coverages and related risk management services through independent agencies and brokers. The Personal Insurance segment offers property and casualty insurance covering personal risks, primarily automobile and homeowners’ insurance to individuals through independent agencies and brokers. The Travelers Companies, Inc. was founded in 1853 and is based in New York, New York.