Contrasting Atlas Financial Holdings (AFH) & XL Group (NYSE:XL)

Atlas Financial Holdings (NASDAQ: AFH) and XL Group (NYSE:XL) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitabiliy, valuation, risk and earnings.

Profitability

This table compares Atlas Financial Holdings and XL Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Atlas Financial Holdings 1.46% -4.19% -1.33%
XL Group 7.53% 4.88% 1.06%

Volatility & Risk

Atlas Financial Holdings has a beta of 0.88, suggesting that its share price is 12% less volatile than the S&P 500. Comparatively, XL Group has a beta of 1.02, suggesting that its share price is 2% more volatile than the S&P 500.

Dividends

XL Group pays an annual dividend of $0.88 per share and has a dividend yield of 2.0%. Atlas Financial Holdings does not pay a dividend. XL Group pays out 28.6% of its earnings in the form of a dividend. Atlas Financial Holdings has increased its dividend for 4 consecutive years.

Insider & Institutional Ownership

79.6% of Atlas Financial Holdings shares are owned by institutional investors. Comparatively, 97.6% of XL Group shares are owned by institutional investors. 12.7% of Atlas Financial Holdings shares are owned by company insiders. Comparatively, 2.6% of XL Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Atlas Financial Holdings and XL Group’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Atlas Financial Holdings $184.65 million 1.00 -$3.11 million $0.16 95.94
XL Group $11.02 billion 1.04 $1.51 billion $3.08 14.37

XL Group has higher revenue and earnings than Atlas Financial Holdings. XL 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.

Analyst Ratings

This is a summary of current ratings and target prices for Atlas Financial Holdings and XL Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Atlas Financial Holdings 0 0 3 0 3.00
XL Group 0 6 6 0 2.50

Atlas Financial Holdings presently has a consensus price target of $18.50, indicating a potential upside of 20.52%. XL Group has a consensus price target of $44.90, indicating a potential upside of 1.42%. Given Atlas Financial Holdings’ stronger consensus rating and higher probable upside, equities analysts clearly believe Atlas Financial Holdings is more favorable than XL Group.

Summary

XL Group beats Atlas Financial Holdings on 11 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.

XL Group Company Profile

XL Group plc is an insurance and reinsurance company providing property, casualty and specialty products to industrial, commercial and professional firms, insurance companies and other enterprises. The Company operates through two segments: Insurance and Reinsurance. The Company’s Insurance segment is organized into four product divisions: Global Casualty (Casualty); Global Energy Property, & Construction (EPC); Global Professional (Professional), and Global Specialty (Specialty). Its insurance operations provide insurance policies for corporate risks that may require large limits, use of a captive insurance company and the need for a program of locally issued policies. The Reinsurance segment provides casualty, property risk, property catastrophe, specialty, and other reinsurance lines on a global basis with business being written on both a proportional and non-proportional treaty basis, and also on a facultative basis.

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