United Fire Group (NASDAQ: UFCS) and Atlas Financial Holdings (NASDAQ:AFH) 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, profitability, valuation, institutional ownership, analyst recommendations, risk and dividends.
Insider and Institutional Ownership
58.1% of United Fire Group shares are held by institutional investors. Comparatively, 80.3% of Atlas Financial Holdings shares are held by institutional investors. 5.9% of United Fire Group shares are held by company insiders. Comparatively, 12.7% of Atlas Financial Holdings shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Valuation & Earnings
This table compares United Fire Group and Atlas Financial Holdings’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|United Fire Group||$1.16 billion||0.94||$59.36 million||$1.83||23.43|
|Atlas Financial Holdings||$197.16 million||0.99||-$1.70 million||$0.23||70.87|
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.
This is a summary of current recommendations and price targets for United Fire Group and Atlas Financial Holdings, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|United Fire Group||0||2||0||0||2.00|
|Atlas Financial Holdings||0||0||3||0||3.00|
United Fire Group currently has a consensus price target of $46.00, indicating a potential upside of 7.28%. Atlas Financial Holdings has a consensus price target of $18.50, indicating a potential upside of 13.50%. Given Atlas Financial Holdings’ stronger consensus rating and higher probable upside, analysts clearly believe Atlas Financial Holdings is more favorable than United Fire Group.
This table compares United Fire Group and Atlas Financial Holdings’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|United Fire Group||4.07%||4.33%||1.01%|
|Atlas Financial Holdings||1.67%||-3.32%||-1.03%|
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.
Risk and Volatility
United Fire Group has a beta of 0.79, indicating that its share price is 21% less volatile than the S&P 500. Comparatively, Atlas Financial Holdings has a beta of 0.88, indicating that its share price is 12% less volatile than the S&P 500.
Atlas Financial Holdings beats United Fire Group on 8 of the 15 factors compared between the two stocks.
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).
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.
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