Analyzing Primerica (NYSE:PRI) & Universal Insurance (NYSE:UVE)

Primerica (NYSE:PRI) and Universal Insurance (NYSE:UVE) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, earnings, analyst recommendations, risk and valuation.

Earnings and Valuation

This table compares Primerica and Universal Insurance”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Primerica	$3.29 billion	2.75	$751.23 million	$24.90	11.82
Universal Insurance	$1.63 billion	0.75	$182.95 million	$7.58	5.82

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

Risk and Volatility

Primerica has a beta of 0.86, meaning that its stock price is 14% less volatile than the S&P 500. Comparatively, Universal Insurance has a beta of 0.72, meaning that its stock price is 28% less volatile than the S&P 500.

Insider and Institutional Ownership

90.9% of Primerica shares are owned by institutional investors. Comparatively, 66.6% of Universal Insurance shares are owned by institutional investors. 0.6% of Primerica shares are owned by insiders. Comparatively, 15.0% of Universal Insurance shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

Primerica pays an annual dividend of $4.80 per share and has a dividend yield of 1.6%. Universal Insurance pays an annual dividend of $0.64 per share and has a dividend yield of 1.5%. Primerica pays out 19.3% of its earnings in the form of a dividend. Universal Insurance pays out 8.4% 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. Primerica has raised its dividend for 2 consecutive years. Primerica is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Primerica and Universal Insurance’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Primerica	23.20%	32.45%	5.35%
Universal Insurance	13.49%	37.67%	7.12%

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Primerica and Universal Insurance, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Primerica	0	6	3	0	2.33
Universal Insurance	0	2	1	0	2.33

Primerica presently has a consensus target price of $315.57, indicating a potential upside of 7.20%. Universal Insurance has a consensus target price of $45.00, indicating a potential upside of 1.98%. Given Primerica’s higher possible upside, analysts plainly believe Primerica is more favorable than Universal Insurance.

Summary

Primerica beats Universal Insurance on 12 of the 16 factors compared between the two stocks.

About Primerica

Primerica, Inc., together with its subsidiaries, provides financial products and services to middle-income households in the United States and Canada. The company operates in four segments: Term Life Insurance; Investment and Savings Products; Senior Health; and Corporate and Other Distributed Products. The Term Life Insurance segment underwrites individual term life insurance products. The Investment and Savings Products segment provides mutual funds and various retirement plans, managed investments, variable and fixed annuities, and fixed indexed annuities. The Senior Health segment offers segregated funds; and medicare advantage and supplement plans. The Corporate and Other Distributed Products segment provides mortgage loans; prepaid legal services that assist subscribers with legal matters, such as drafting wills, living wills and powers of attorney, trial defense, and motor vehicle-related matters; ID theft defense services; auto and homeowners' insurance; home automation solutions; and insurance products, including supplemental and accidental death, and disability insurance. It distributes and sells its products through licensed sales representatives. Primerica, Inc. was founded in 1927 and is headquartered in Duluth, Georgia.

About Universal Insurance

Universal Insurance Holdings, Inc., together with its subsidiaries, operates as an integrated insurance holding company in the United States. It develops, markets, and underwrites insurance products for personal residential insurance, such as homeowners, renters/tenants, condo unit owners, and dwelling/fire; and offers allied lines, coverage for other structures, and personal property, liability, and personal articles coverages. The company also advises on actuarial issues, oversees distribution, administers claims payments, performs policy administration and underwriting, and assists with reinsurance negotiations; places and manages reinsurance programs for the insurance entities; and operates Clovered.com, a digital agency for various carrier partners and utilization of digital applications for adjusting claims. It offers its products through a network of independent agents, as well as direct-to-consumer online solutions, including digital insurance agency. The company was formerly known as Universal Heights, Inc. and changed its name to Universal Insurance Holdings, Inc. in January 2001. Universal Insurance Holdings, Inc. was incorporated in 1990 and is headquartered in Fort Lauderdale, Florida.