Reviewing Safety Insurance Group (SAFT) and Infinity Property and Casualty Corporation (IPCC)

Safety Insurance Group (NASDAQ: SAFT) and Infinity Property and Casualty Corporation (NASDAQ:IPCC) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their profitabiliy, institutional ownership, dividends, valuation, analyst recommendations, earnings and risk.

Valuation & Earnings

This table compares Safety Insurance Group and Infinity Property and Casualty Corporation’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Safety Insurance Group $824.76 million 1.31 $107.60 million $4.22 16.81
Infinity Property and Casualty Corporation $1.55 billion 0.71 $116.87 million $4.15 24.11

Infinity Property and Casualty Corporation has higher revenue and earnings than Safety Insurance Group. Safety Insurance Group is trading at a lower price-to-earnings ratio than Infinity Property and Casualty Corporation, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

79.3% of Safety Insurance Group shares are held by institutional investors. Comparatively, 95.8% of Infinity Property and Casualty Corporation shares are held by institutional investors. 6.2% of Safety Insurance Group shares are held by insiders. Comparatively, 3.3% of Infinity Property and Casualty Corporation shares are held by 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.

Analyst Recommendations

This is a summary of recent ratings and target prices for Safety Insurance Group and Infinity Property and Casualty Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Safety Insurance Group 0 1 0 0 2.00
Infinity Property and Casualty Corporation 0 1 1 0 2.50

Safety Insurance Group presently has a consensus price target of $60.00, suggesting a potential downside of 15.43%. Infinity Property and Casualty Corporation has a consensus price target of $99.50, suggesting a potential downside of 0.55%. Given Infinity Property and Casualty Corporation’s stronger consensus rating and higher possible upside, analysts clearly believe Infinity Property and Casualty Corporation is more favorable than Safety Insurance Group.

Dividends

Safety Insurance Group pays an annual dividend of $2.80 per share and has a dividend yield of 3.9%. Infinity Property and Casualty Corporation pays an annual dividend of $2.32 per share and has a dividend yield of 2.3%. Safety Insurance Group pays out 66.4% of its earnings in the form of a dividend. Infinity Property and Casualty Corporation pays out 55.9% 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. Safety Insurance Group has raised its dividend for 9 consecutive years. Safety Insurance Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Safety Insurance Group and Infinity Property and Casualty Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Safety Insurance Group 7.75% 9.42% 3.61%
Infinity Property and Casualty Corporation 2.97% 6.21% 1.80%

Risk and Volatility

Safety Insurance Group has a beta of 0.77, suggesting that its share price is 23% less volatile than the S&P 500. Comparatively, Infinity Property and Casualty Corporation has a beta of 0.82, suggesting that its share price is 18% less volatile than the S&P 500.

Summary

Infinity Property and Casualty Corporation beats Safety Insurance Group on 9 of the 17 factors compared between the two stocks.

Safety Insurance Group Company Profile

Safety Insurance Group, Inc. is a provider of private passenger automobile insurance. The Company offers a portfolio of property and casualty insurance products. The Company is engaged in property and casualty insurance operations. The Company’s product line includes private passenger automobile, commercial automobile, homeowners, business owners’ policies, personal umbrella, dwelling fire, commercial umbrella, inland marine and watercraft. The Company operates through its insurance company subsidiaries, Safety Insurance Company, Safety Indemnity Insurance Company, and Safety Property and Casualty Insurance Company. Private passenger automobile policies provide coverage for bodily injury and property damage to others, no-fault personal injury coverage for the insured/insured’s car occupants, and physical damage coverage for an insured’s own vehicle for collision or other perils. Commercial automobile policies provide coverage for bodily injury and property damage to others.

Infinity Property and Casualty Corporation Company Profile

Infinity Property and Casualty Corporation is a holding company. The Company’s segments include Personal Auto, Commercial Vehicle and Classic Collector (its segments are Personal Auto and Commercial Vehicle). The Company writes personal automobile insurance with a concentration on nonstandard automobile insurance, commercial vehicle insurance and classic collector automobile insurance. The Company offers personal and commercial automobile insurance in states, including Arizona, California, Florida and Texas. Personal Automobile is its insurance product, which provides coverage to individuals for liability to others for bodily injury and property damage and for physical damage to an insured’s own vehicle from collision and various other perils. Commercial Vehicle provides coverage to businesses for liability to others for bodily injury and property damage and for physical damage to vehicles from collision. Classic Collector provides protection for classic collectible automobiles.

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