Critical Review: ProAssurance (NYSE:PRA) and Kingstone Companies (NYSE:KINS)

ProAssurance (NYSE:PRA) and Kingstone Companies (NASDAQ:KINS) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, institutional ownership, valuation, profitability and risk.

Volatility & Risk

ProAssurance has a beta of 0.55, meaning that its share price is 45% less volatile than the S&P 500. Comparatively, Kingstone Companies has a beta of 0.62, meaning that its share price is 38% less volatile than the S&P 500.

Dividends

ProAssurance pays an annual dividend of $1.24 per share and has a dividend yield of 3.2%. Kingstone Companies pays an annual dividend of $0.40 per share and has a dividend yield of 5.0%. ProAssurance pays out 83.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Kingstone Companies pays out 85.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Kingstone Companies has increased its dividend for 6 consecutive years. Kingstone Companies is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares ProAssurance and Kingstone Companies’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
ProAssurance $886.03 million 2.36 $47.06 million $1.48 26.28
Kingstone Companies $113.77 million 0.76 $3.09 million $0.47 17.17

ProAssurance has higher revenue and earnings than Kingstone Companies. Kingstone Companies is trading at a lower price-to-earnings ratio than ProAssurance, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent recommendations and price targets for ProAssurance and Kingstone Companies, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ProAssurance 1 2 1 0 2.00
Kingstone Companies 0 0 1 0 3.00

ProAssurance presently has a consensus price target of $41.00, indicating a potential upside of 5.43%. Kingstone Companies has a consensus price target of $13.00, indicating a potential upside of 61.09%. Given Kingstone Companies’ stronger consensus rating and higher possible upside, analysts plainly believe Kingstone Companies is more favorable than ProAssurance.

Profitability

This table compares ProAssurance and Kingstone Companies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ProAssurance 5.33% 2.58% 0.86%
Kingstone Companies -2.03% -3.77% -1.21%

Institutional & Insider Ownership

80.3% of ProAssurance shares are held by institutional investors. Comparatively, 44.1% of Kingstone Companies shares are held by institutional investors. 1.7% of ProAssurance shares are held by company insiders. Comparatively, 8.9% of Kingstone Companies shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

ProAssurance beats Kingstone Companies on 10 of the 16 factors compared between the two stocks.

About ProAssurance

ProAssurance Corporation, through its subsidiaries, provides property and casualty insurance, and reinsurance products in the United States. The company operates through Specialty Property and Casualty, Workers' Compensation Insurance, Segregated Portfolio Cell Reinsurance, and Lloyd's Syndicate segments. It offers professional liability insurance for healthcare professionals and facilities; professional liability insurance for attorneys; liability insurance for medical technology and life sciences risks; and workers' compensation insurance for employers, groups, and associations. The company also participates in Lloyd's of London Syndicate 1729, which underwrites property and casualty insurance, and reinsurance; and Syndicate 6131 that underwrites contingency and specialty property insurance. ProAssurance Corporation markets its products through independent agencies and brokers, as well as an internal sales force. The company was founded in 1976 and is headquartered in Birmingham, Alabama.

About Kingstone Companies

Kingstone Companies, Inc., through its subsidiary, Kingstone Insurance Company, underwrites property and casualty insurance products to small businesses and individuals in New York. The company offers personal lines insurance products, including homeowners and dwelling fire multi-peril, cooperative/condominiums, renters, and personal umbrella policies. It also provides commercial liability policies, such as business owner's policies comprising primarily of small business retail, service, and office risks; artisan's liability policies for small independent contractors; multi-peril policies for larger and specialized risks, and business owner's risks; and commercial umbrella policies. In addition, the company offers for-hire vehicle physical damage only policies for livery and car service vehicles and taxicabs; and canine legal liability policies, as well as reinsurance products. It sells its products through retail and wholesale agents and brokers. The company was formerly known as DCAP Group, Inc. and changed its name to Kingstone Companies, Inc. in July 2009. Kingstone Companies, Inc. was founded in 1886 and is headquartered in Kingston, New York.

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