AmTrust Financial Services (NASDAQ:AFSI) and Mercury General (NYSE:MCY) are both mid-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their dividends, profitability, valuation, institutional ownership, risk, earnings and analyst recommendations.
Valuation & Earnings
This table compares AmTrust Financial Services and Mercury General’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|AmTrust Financial Services||$5.96 billion||0.49||-$348.88 million||N/A||N/A|
|Mercury General||$3.38 billion||0.84||-$5.72 million||$1.80||28.43|
Mercury General has lower revenue, but higher earnings than AmTrust Financial Services.
This table compares AmTrust Financial Services and Mercury General’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|AmTrust Financial Services||3.98%||-17.61%||-1.84%|
This is a summary of recent ratings and recommmendations for AmTrust Financial Services and Mercury General, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|AmTrust Financial Services||0||1||0||0||2.00|
AmTrust Financial Services currently has a consensus target price of $14.75, suggesting a potential upside of 0.00%. Mercury General has a consensus target price of $69.00, suggesting a potential upside of 34.84%. Given Mercury General’s stronger consensus rating and higher probable upside, analysts plainly believe Mercury General is more favorable than AmTrust Financial Services.
Volatility and Risk
AmTrust Financial Services has a beta of 1.09, indicating that its stock price is 9% more volatile than the S&P 500. Comparatively, Mercury General has a beta of 0.23, indicating that its stock price is 77% less volatile than the S&P 500.
Insider & Institutional Ownership
38.0% of AmTrust Financial Services shares are held by institutional investors. Comparatively, 48.7% of Mercury General shares are held by institutional investors. 50.8% of AmTrust Financial Services shares are held by insiders. Comparatively, 34.2% of Mercury General shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
AmTrust Financial Services pays an annual dividend of $0.34 per share and has a dividend yield of 2.3%. Mercury General pays an annual dividend of $2.51 per share and has a dividend yield of 4.9%. Mercury General pays out 139.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. AmTrust Financial Services has raised its dividend for 12 consecutive years and Mercury General has raised its dividend for 33 consecutive years. Mercury General is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Mercury General beats AmTrust Financial Services on 11 of the 16 factors compared between the two stocks.
AmTrust Financial Services Company Profile
AmTrust Financial Services, Inc. provides property and casualty insurance in the United States and internationally. The company operates in three segments: Small Commercial Business, Specialty Risk and Extended Warranty, and Specialty Program. The Small Commercial Business segment offers workers' compensation insurance products; and commercial package, and other property and casualty insurance products, such as commercial property, general liability, inland marine, employment practices liability, commercial automobile, and umbrella coverage to small businesses. The Specialty Risk and Extended Warranty segment provides custom designed coverages, such as accidental damage plans, mechanical breakdown protection, and payment protection plans in connection with the sale of consumer and commercial goods; and coverage for niche property, casualty, and specialty liability risks comprising general liability, employers' liability, and professional and medical liability. The Specialty Program segment offers workers' compensation, general liability, commercial auto liability, property coverage, excess and surplus lines programs, and other specialty commercial property and casualty insurance products to small and middle market companies. The company also provides reinsurance services primarily for personal and commercial automotive business. It distributes its policies third-party brokers, agents, retailers, or administrators. AmTrust Financial Services, Inc. was founded in 1998 and is based in New York, New York.
Mercury General Company Profile
Mercury General Corporation, together with its subsidiaries, engages in writing personal automobile insurance in the United States. The company also writes homeowners, commercial automobile, commercial property, mechanical protection, fire, and umbrella insurance. Its automobile insurance products cover collision, property damage, bodily injury, comprehensive, personal injury protection, underinsured and uninsured motorist, and other hazards; and homeowners' insurance products cover dwelling, liability, personal property, fire, and other hazards. The company sells its policies through a network of independent agents, 100% owned insurance agents, and direct channels in Arizona, California, Florida, Georgia, Illinois, Nevada, New Jersey, New York, Oklahoma, Texas, and Virginia. Mercury General Corporation was founded in 1961 and is headquartered in Los Angeles, California.
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