Reviewing Selective Insurance Group (NASDAQ:SIGI) and Employers (NYSE:EIG)

Selective Insurance Group (NASDAQ:SIGI) and Employers (NYSE:EIG) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, risk, profitability and dividends.

Valuation and Earnings

This table compares Selective Insurance Group and Employers”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Selective Insurance Group	$4.55 billion	1.30	$365.24 million	$5.66	17.17
Employers	$869.30 million	1.44	$118.10 million	$4.72	10.48

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

Risk & Volatility

Selective Insurance Group has a beta of 0.56, meaning that its stock price is 44% less volatile than the S&P 500. Comparatively, Employers has a beta of 0.24, meaning that its stock price is 76% less volatile than the S&P 500.

Dividends

Selective Insurance Group pays an annual dividend of $1.40 per share and has a dividend yield of 1.4%. Employers pays an annual dividend of $1.20 per share and has a dividend yield of 2.4%. Selective Insurance Group pays out 24.7% of its earnings in the form of a dividend. Employers pays out 25.4% 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.

Analyst Recommendations

This is a summary of current recommendations and price targets for Selective Insurance Group and Employers, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Selective Insurance Group	1	4	2	0	2.14
Employers	0	2	1	0	2.33

Selective Insurance Group presently has a consensus target price of $98.50, suggesting a potential upside of 1.34%. Employers has a consensus target price of $55.00, suggesting a potential upside of 11.18%. Given Employers’ stronger consensus rating and higher possible upside, analysts clearly believe Employers is more favorable than Selective Insurance Group.

Insider and Institutional Ownership

82.9% of Selective Insurance Group shares are held by institutional investors. Comparatively, 80.5% of Employers shares are held by institutional investors. 1.5% of Selective Insurance Group shares are held by insiders. Comparatively, 1.5% of Employers shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Selective Insurance Group and Employers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Selective Insurance Group	5.12%	8.75%	1.96%
Employers	13.76%	9.95%	2.79%

Summary

Selective Insurance Group beats Employers on 8 of the 15 factors compared between the two stocks.

About Selective Insurance Group

Selective Insurance Group, Inc., together with its subsidiaries, provides insurance products and services in the United States. The company operates through four segments: Standard Commercial Lines, Standard Personal Lines, E&S Lines, and Investments. It offers casualty insurance products that covers the financial consequences of employee injuries in the course of employment and bodily injury and/or property damage to a third party; property insurance products, which covers the accidental loss of an insured's real property, personal property, and/or earnings due to the property's loss; and flood insurance products. The company also invests in fixed income investments and commercial mortgage loans, as well as equity securities, short-term investments, and alternative investments, and other investments. It offers its insurance products and services to businesses, non-profit organizations, local government agencies, and individuals through independent retail agents and wholesale general agents. The company was founded in 1926 and is headquartered in Branchville, New Jersey.

About Employers

Employers Holdings, Inc., through its subsidiaries, operates in the commercial property and casualty insurance industry primarily in the United States. The company operates in two segments, Employers and Cerity. It offers workers’ compensation insurance to small businesses in low to medium hazard industries under the Employers and Cerity brands. The company markets its products through local, regional, and national agents and brokers; alternative distribution channels; and national, regional, and local trade groups and associations, as well as directly to customers. Employers Holdings, Inc. was founded in 2000 and is based in Henderson, Nevada.