Analyzing Tiptree (TIPT) & Alleghany (Y)

Tiptree (NASDAQ:TIPT) and Alleghany (NYSE:Y) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, earnings, analyst recommendations, profitability, institutional ownership and risk.

Institutional & Insider Ownership

70.5% of Tiptree shares are owned by institutional investors. Comparatively, 81.3% of Alleghany shares are owned by institutional investors. 23.7% of Tiptree shares are owned by company insiders. Comparatively, 4.0% of Alleghany shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Dividends

Tiptree pays an annual dividend of $0.14 per share and has a dividend yield of 2.4%. Alleghany does not pay a dividend.

Profitability

This table compares Tiptree and Alleghany’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Tiptree 5.41% -3.93% -0.87%
Alleghany 12.34% 5.42% 1.81%

Volatility and Risk

Tiptree has a beta of -0.08, indicating that its share price is 108% less volatile than the S&P 500. Comparatively, Alleghany has a beta of 0.94, indicating that its share price is 6% less volatile than the S&P 500.

Valuation and Earnings

This table compares Tiptree and Alleghany’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Tiptree $581.80 million 0.36 $4.48 million N/A N/A
Alleghany $6.42 billion 1.43 $90.13 million $2.04 303.46

Alleghany has higher revenue and earnings than Tiptree.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Tiptree and Alleghany, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Tiptree 0 0 0 0 N/A
Alleghany 0 0 1 0 3.00

Alleghany has a consensus price target of $650.00, suggesting a potential upside of 5.00%. Given Alleghany’s higher probable upside, analysts clearly believe Alleghany is more favorable than Tiptree.

Summary

Alleghany beats Tiptree on 10 of the 12 factors compared between the two stocks.

Tiptree Company Profile

Tiptree Inc., through its subsidiaries, underwrites and administers specialty insurance products primarily in the United States. It operates through three segments: Specialty Insurance, Asset Management, and Mortgage. The company provides credit protection insurance, warranty and service contract products, and insurance programs that underwrite niche personal and commercial lines of insurance, as well as offers value-add services, including premium finance and business processing services. It also engages in asset management operations; the provision of mortgage loans for institutional investors; and other investment activities. Tiptree Inc. markets its products through a network of independent insurance brokers and managing general agencies. The company was formerly known as Tiptree Financial Inc. and changed its name to Tiptree Inc. in December 2016. Tiptree Inc. was incorporated in 2007 and is based in New York, New York.

Alleghany Company Profile

Alleghany Corporation provides property and casualty reinsurance and insurance products in the United States and internationally. The company operates in two segments, Reinsurance and Insurance. The Reinsurance segment offers property reinsurance products, including fire, allied lines, auto physical damage, and homeowners multiple peril reinsurance products; and casualty and other reinsurance products, such as liability, medical malpractice, ocean marine and aviation, auto liability, accident and health, surety, and credit reinsurance products. This segment distributes its products and services through brokers, as well as directly to insurance and reinsurance companies. The Insurance segment underwrites specialty insurance coverages in the property, as well as umbrella/excess, general, management, and professional liability lines; and surety products comprising commercial and contract surety bonds, as well as workers' compensation insurance products. This segment distributes its products through independent wholesale insurance brokers, and retail and general insurance agents. The company also explores for and produces oil and gas; manufactures custom trailers and truck bodies for the moving and storage industry, and other markets; provides technical engineering services for pharmaceutical and biotechnology industries; and owns and manages improved and unimproved commercial land, and residential lots. In addition, it operates as a toy, and entertainment and musical instrument company; manufacturer/remanufacturer of specialty machine tools, as well as supplier of replacement parts, accessories, and services for various cutting technologies; structural steel fabricator and erector; and provider of products and services for the funeral and cemetery industries, and precast concrete markets. As of December 31, 2017, the company owned approximately 226 acres of property. Alleghany Corporation was founded in 1929 and is based in New York, New York.

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