Critical Review: The Hartford Insurance Group (NYSE:HIG) versus Axis Capital (NYSE:AXS)

The Hartford Insurance Group (NYSE:HIG) and Axis Capital (NYSE:AXS) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their analyst recommendations, profitability, risk, institutional ownership, dividends, valuation and earnings.

Profitability

This table compares The Hartford Insurance Group and Axis Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
The Hartford Insurance Group	15.85%	20.93%	4.52%
Axis Capital	14.62%	16.61%	2.71%

Valuation & Earnings

This table compares The Hartford Insurance Group and Axis Capital”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
The Hartford Insurance Group	$28.37 billion	1.25	$3.84 billion	$16.52	8.03
Axis Capital	$6.56 billion	1.14	$1.01 billion	$13.09	7.99

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

Dividends

The Hartford Insurance Group pays an annual dividend of $2.40 per share and has a dividend yield of 1.8%. Axis Capital pays an annual dividend of $1.76 per share and has a dividend yield of 1.7%. The Hartford Insurance Group pays out 14.5% of its earnings in the form of a dividend. Axis Capital 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. The Hartford Insurance Group has raised its dividend for 12 consecutive years. The Hartford Insurance Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

The Hartford Insurance Group has a beta of 0.49, indicating that its share price is 51% less volatile than the S&P 500. Comparatively, Axis Capital has a beta of 0.45, indicating that its share price is 55% less volatile than the S&P 500.

Institutional & Insider Ownership

93.4% of The Hartford Insurance Group shares are held by institutional investors. Comparatively, 93.4% of Axis Capital shares are held by institutional investors. 1.3% of The Hartford Insurance Group shares are held by insiders. Comparatively, 0.6% of Axis Capital shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and price targets for The Hartford Insurance Group and Axis Capital, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
The Hartford Insurance Group	0	12	5	1	2.39
Axis Capital	0	5	9	0	2.64

The Hartford Insurance Group presently has a consensus target price of $145.25, suggesting a potential upside of 9.47%. Axis Capital has a consensus target price of $118.69, suggesting a potential upside of 13.44%. Given Axis Capital’s stronger consensus rating and higher probable upside, analysts clearly believe Axis Capital is more favorable than The Hartford Insurance Group.

Summary

The Hartford Insurance Group beats Axis Capital on 13 of the 18 factors compared between the two stocks.

About The Hartford Insurance Group

The Hartford Financial Services Group, Inc., together with its subsidiaries, provides insurance and financial services to individual and business customers in the United States, the United Kingdom, and internationally. Its Commercial Lines segment offers insurance coverages, including workers' compensation, property, automobile, general and professional liability, package business, umbrella, fidelity and surety, marine, livestock, accident, health, and reinsurance through regional offices, branches, sales and policyholder service centers, independent retail agents and brokers, wholesale agents, and reinsurance brokers. The company's Personal Lines segment provides automobile, homeowners, and personal umbrella coverages through direct-to-consumer channels and independent agents. Its Property & Casualty Other Operations segment offers coverage for asbestos and environmental exposures. The company's Group Benefits segment provides group life, disability, and other group coverages to members of employer groups, associations, and affinity groups through direct insurance policies; reinsurance to other insurance companies; employer paid and voluntary product coverages; disability underwriting, administration, and claims processing to self-funded employer plans; and leave management solution. This segment also distributes its group insurance products and services through brokers, consultants, third-party administrators, trade associations, and private exchanges. Its Hartford Funds segment offers managed mutual funds across various asset classes; and exchange-traded funds through broker-dealer organizations, independent financial advisers, defined contribution plans, financial consultants, bank trust groups, and registered investment advisers, as well as investment management, distribution, and administrative services, such as product design, implementation, and oversight. The company was founded in 1810 and is headquartered in Hartford, Connecticut.

About Axis Capital

AXIS Capital Holdings Limited, through its subsidiaries, provides various specialty insurance and reinsurance products in Bermuda, the United States, and internationally. It operates through two segments, Insurance and Reinsurance. The Insurance segment offers professional insurance products that cover directors' and officers' liability, errors and omissions, employment practices, fiduciary, crime, professional indemnity, medical malpractice, and other financial insurance related coverages for commercial enterprises, financial institutions, not-for-profit organizations, and other professional service providers; and property insurance products for commercial buildings, residential premises, construction projects, property in transit, onshore renewable energy installations, and physical damage and business interruption following an act of terrorism. This segment also provides marine and aviation insurance services for offshore energy, renewable offshore energy, cargo, liability, including kidnap and ransom, fine art, specie, and hull war, hull and liability, and specific war coverage for passenger airlines, cargo operations, general aviation operations, airports, aviation authorities, security firms, and product manufacturers; personal accident, travel insurance, specialty health products for employer and affinity groups, and pet insurance products; and liability, cyber, and credit and political risk insurance services. The Reinsurance segment offers agriculture, marine and aviation, catastrophe, accidental and health, credit and surety, motor, professional, travel, life, engineering, property, and liability reinsurance products. AXIS Capital Holdings Limited was founded in 2001 and is headquartered in Pembroke, Bermuda.