Atlas Financial Holdings (NASDAQ: AFH) and United Fire Group (NASDAQ:UFCS) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, dividends, analyst recommendations, profitability, risk, institutional ownership and valuation.
Insider & Institutional Ownership
78.4% of Atlas Financial Holdings shares are owned by institutional investors. Comparatively, 58.6% of United Fire Group shares are owned by institutional investors. 12.7% of Atlas Financial Holdings shares are owned by insiders. Comparatively, 5.9% of United Fire Group shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
This table compares Atlas Financial Holdings and United Fire Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Atlas Financial Holdings||1.67%||-3.32%||-1.03%|
|United Fire Group||4.07%||4.33%||1.01%|
Valuation and Earnings
This table compares Atlas Financial Holdings and United Fire Group’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Atlas Financial Holdings||$197.16 million||1.01||-$1.70 million||$0.23||71.96|
|United Fire Group||$1.16 billion||0.93||$59.36 million||$1.83||23.44|
United Fire Group has higher revenue and earnings than Atlas Financial Holdings. United Fire Group is trading at a lower price-to-earnings ratio than Atlas Financial Holdings, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Atlas Financial Holdings has a beta of 0.88, meaning that its stock price is 12% less volatile than the S&P 500. Comparatively, United Fire Group has a beta of 0.79, meaning that its stock price is 21% less volatile than the S&P 500.
United Fire Group pays an annual dividend of $1.12 per share and has a dividend yield of 2.6%. Atlas Financial Holdings does not pay a dividend. United Fire Group pays out 61.2% of its earnings in the form of a dividend.
This is a breakdown of current ratings and recommmendations for Atlas Financial Holdings and United Fire Group, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Atlas Financial Holdings||0||0||3||0||3.00|
|United Fire Group||0||2||0||0||2.00|
Atlas Financial Holdings currently has a consensus target price of $18.50, indicating a potential upside of 11.78%. United Fire Group has a consensus target price of $46.00, indicating a potential upside of 7.25%. Given Atlas Financial Holdings’ stronger consensus rating and higher probable upside, equities research analysts plainly believe Atlas Financial Holdings is more favorable than United Fire Group.
Atlas Financial Holdings beats United Fire Group on 9 of the 16 factors compared between the two stocks.
Atlas Financial Holdings Company Profile
Atlas Financial Holdings Inc formerly JJR VI Acquisition Corp is a Canada-based company. It is engaged in the business of providing commercial automobile insurance in the United States with a niche market orientation. The Company’s automobile insurance products provide coverage in three areas: liability, accident benefits and physical damage. Liability insurance provides coverage where the insured is responsible for an automobile accident, for the payment for injuries and property damage to third parties. Accident benefit policies or personal injury protection policies provide coverage for loss of income, medical and rehabilitation expenses for insured persons who are injured in an automobile accident, Physical damage coverages provide for the payment of damages to an insured automobile arising from a collision with another object or from other risks. In January 2013, the Company acquired Camelot Services Inc. and its insurance subsidiary, Gateway Insurance Company.
United Fire Group Company Profile
United Fire Group, Inc., formerly United Fire & Casualty Company, is engaged in the business of writing property and casualty insurance and life insurance and selling annuities. The Company operates in two segments: property and casualty insurance, and life insurance. The Company’s property and casualty insurance segment consists of commercial lines insurance, including surety bonds, personal lines insurance and assumed insurance. Its life insurance segment consists of deferred and immediate annuities, universal life insurance products and traditional life insurance products. Its life insurance segment consists solely of the operations of United Life Insurance Company. On February 1, 2012, the Company completed a holding company reorganization of United Fire Group, Inc., United Fire & Casualty Company and UFC MergeCo, Inc. On March 28, 2011, the Company acquired Mercer Insurance Group, Inc. (Mercer Insurance Group).
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