Hallmark Financial Services (NASDAQ: HALL) and MBIA (NYSE:MBI) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitability, risk, earnings, dividends, valuation, analyst recommendations and institutional ownership.
Earnings and Valuation
This table compares Hallmark Financial Services and MBIA’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Hallmark Financial Services||$375.95 million||0.50||$6.52 million||($0.26)||-39.92|
|MBIA||$294.00 million||2.33||-$338.00 million||($14.51)||-0.51|
Insider & Institutional Ownership
65.0% of Hallmark Financial Services shares are owned by institutional investors. 28.7% of Hallmark Financial Services shares are owned by company insiders. Comparatively, 4.1% of MBIA shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
This table compares Hallmark Financial Services and MBIA’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Hallmark Financial Services||-1.19%||-0.42%||-0.09%|
This is a summary of recent recommendations and price targets for Hallmark Financial Services and MBIA, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Hallmark Financial Services||0||1||0||0||2.00|
MBIA has a consensus target price of $14.50, suggesting a potential upside of 94.11%. Given MBIA’s stronger consensus rating and higher possible upside, analysts clearly believe MBIA is more favorable than Hallmark Financial Services.
Volatility & Risk
Hallmark Financial Services has a beta of 0.84, suggesting that its stock price is 16% less volatile than the S&P 500. Comparatively, MBIA has a beta of 2.46, suggesting that its stock price is 146% more volatile than the S&P 500.
About Hallmark Financial Services
Hallmark Financial Services, Inc. is an insurance holding company. The Company markets, distributes, underwrites and services its property/casualty insurance products to businesses and individuals. Its business involves marketing, distributing, underwriting and servicing insurance products, as well as providing other insurance related services. Its segments include Standard Commercial Segment, Specialty Commercial Segment and Personal Segment. The Company’s Standard Commercial P&C operating unit primarily underwrites low-severity, short-tailed commercial property/casualty insurance products in the standard market. The Company reinsures a portion of the risk it underwrites in order to control the exposure to losses and to protect capital resources. Its Workers Compensation operating unit specializes in small and middle market workers compensation business. Its Specialty Commercial operating unit offers general aviation and satellite launch insurance products and services.
MBIA Inc. is a holding company. The Company, through its subsidiaries, is engaged in the financial guarantee insurance businesses in the industry. The Company manages its business within three segments: United States (U.S.) public finance insurance; corporate, and international and structured finance insurance. The U.S. public finance insurance business is primarily operated through National Public Finance Guarantee Corporation. The corporate segment consists of general corporate activities, including providing general support services, including management, legal, accounting, treasury, information technology, and insurance portfolio surveillance, to other operating businesses, and asset and capital management. The international and structured finance insurance business is primarily operated through MBIA Insurance Corporation and its subsidiaries.
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