Head-To-Head Survey: State Auto Financial (STFC) vs. Validus (VR)

State Auto Financial (NASDAQ:STFC) and Validus (NYSE:VR) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their risk, institutional ownership, valuation, dividends, analyst recommendations, profitability and earnings.

Dividends

State Auto Financial pays an annual dividend of $0.40 per share and has a dividend yield of 1.2%. Validus pays an annual dividend of $1.52 per share. State Auto Financial pays out 33.3% of its earnings in the form of a dividend. Validus has increased its dividend for 4 consecutive years.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for State Auto Financial and Validus, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
State Auto Financial 0 1 0 0 2.00
Validus 0 0 0 0 N/A

State Auto Financial currently has a consensus price target of $30.00, suggesting a potential downside of 9.83%.

Earnings & Valuation

This table compares State Auto Financial and Validus’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
State Auto Financial $1.28 billion 1.13 $12.80 million $1.20 27.73
Validus N/A N/A N/A N/A N/A

State Auto Financial has higher revenue and earnings than Validus.

Profitability

This table compares State Auto Financial and Validus’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
State Auto Financial 1.00% 6.09% 1.77%
Validus N/A N/A N/A

Insider and Institutional Ownership

34.6% of State Auto Financial shares are owned by institutional investors. Comparatively, 82.0% of Validus shares are owned by institutional investors. 2.0% of State Auto Financial shares are owned by insiders. Comparatively, 2.3% of Validus shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

State Auto Financial beats Validus on 5 of the 9 factors compared between the two stocks.

About State Auto Financial

State Auto Financial Corporation, through its subsidiaries, engages in writing personal, business, and specialty insurance products. It operates through four segments: Personal Insurance, Commercial Insurance, Specialty Insurance, and Investment Operations. The Personal Insurance segment primarily provides personal automobile, homeowners insurance, and other personal insurance products. The commercial insurance segment primarily provides commercial automobile, commercial multi-peril, fire and allied, general liability, and workers' compensation insurance covering small-to-medium sized commercial insurance market, as well as farm and ranch insurance. The Specialty Insurance segment provides commercial coverages that require specialized product underwriting, claims handling, or risk management services. This segment markets and underwrites specialized property exposures with a focus on catastrophe exposed risks covering property, and general liability; markets and underwrites commercial auto, healthcare, umbrella, property, and general liability coverages; and markets and distributes homogenous risks covering commercial auto, general liability, and property. The Investment Operations segment provides investment management services to affiliated insurance companies. The company markets its products primarily through independent agencies, including retail agencies and wholesale brokers. The company was founded in 1950 and is headquartered in Columbus, Ohio. State Auto Financial Corporation is a subsidiary of State Automobile Mutual Insurance Company.

About Validus

Validus Holdings, Ltd. provides reinsurance coverage, insurance coverage, and insurance linked securities management services worldwide. It operates through three segments: Reinsurance, Insurance, and Asset Management. The Reinsurance segment underwrites property reinsurance products on a catastrophe excess of loss, per risk excess of loss and proportional basis; and aerospace and aviation, agriculture, composite, marine, technical lines, terrorism, trade credit, workers' compensation, and other specialty lines, as well as casualty and financial lines. The Insurance segment underwrites property, accident and health, agriculture, aviation, contingency, marine, and political lines insurance products; bankers blanket bond, commercial crime, computer crime, cyber- crime, professional indemnity, and directors' and officers' insurance products for various financial institutions and other companies; and commercial and institutional risks comprising general, professional, and product liability, as well as miscellaneous malpractice insurance products. This segment also underwrites marine and energy liability, and political risk insurance products, as well as insurance products for repair, maintenance, and upkeep of aircrafts and premises for small companies. The Asset Management segment manages capital for third parties through insurance-linked securities, and other property catastrophe and specialty reinsurance investments. Validus Holdings, Ltd. was founded in 2005 and is based in Pembroke, Bermuda.

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