Selective Insurance Group (SIGI) versus United Fire Group (UFCS ...

Selective Insurance Group (SIGI) versus United Fire Group (UFCS ...

Selective Insurance Group (SIGI) versus United Fire Group (UFCS) Critical Analysis Posted by Jennifer Salazar on Jan 10th, 2018 // United Fi…

Selective Insurance Group (SIGI) versus United Fire Group (UFCS ...

Selective Insurance Group (SIGI) versus United Fire Group (UFCS) Critical Analysis

Posted by Jennifer Salazar on Jan 10th, 2018 //

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

Profitability

This table compares United Fire Group and Selective Insurance Groupâ€™s net margins, return on equity and return on assets.

Net Margins	Return on Equity	Return on Assets
United Fi re Group	1.49%	1.32%	0.30%
Selective Insurance Group	7.36%	11.00%	2.37%

Analyst Ratings

This is a breakdown of recent ratings and price targets for United Fire Group and Selective Insurance Group, as reported by MarketBeat.com.

Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
United Fire Group	0	2	1	0	2.33
Selective Insurance Group	0	4	0	0	2.00

United Fire Group currently has a consensus target price of $46.33, indicating a potential upside of 6.39%. Selective Insurance Group has a consensus target price of $50.91, indicating a potential downside of 11.84%. Given United Fire Groupâ€™s stronger consensus rating and higher probable upside, equities research analysts clearly believe United Fire Group is more favorable than Selective Insurance Group.

Dividends

United Fire Group pays an annual dividend of $1.12 per share and has a dividend yield of 2.6%. Selective Insurance Group pays an annual dividend of $0.72 per share and has a dividend yield of 1.2%. United Fire Group pays out 177.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Selective Insurance Group pays out 23.9% of its earnings in the form of a dividend.

Insider and Institutional Ownership

58.4% of United Fire Group shares are held by institutional investors. Comparatively, 77.8% of Selective Insurance Group shares are held by institutional investors. 5.8% of United Fire Grou p shares are held by company insiders. Comparatively, 3.0% of Selective Insurance Group shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Earnings & Valuation

This table compares United Fire Group and Selective Insurance Groupâ€™s gross revenue, earnings per share and valuation.

Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
United Fire Group	$1.14 billion	0.95	$49.90 million	$0.63	69.13
Selective Insurance Group	$2.28 billion	1.48	$158.49 million	$3.01	19.19

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

Volatility and Risk

United Fire Group has a beta of 0.71, meaning that its stock price is 29% less volatile than the S&P 500. Comparatively, Selective Insurance Group has a beta of 1.45, meaning that its stock price is 45% more volatile than the S&P 500.

Summary

Selective Insurance Group beats United Fire Group on 10 of the 16 factors compared between the two stocks.

About United Fire Group

United Fire Group, Inc., formerly United Fire & Casualty Company, is engaged in the business of writing property and casualty insurance and life insurance and selling annuities. The Company operates in two segments: property and casualty insurance, and life insurance. The Companyâ€™s property and casualty insurance segment consists of commercial lines insurance, including surety bonds, personal lines insurance and assumed insurance. Its life insurance segment consists of deferred and immediate annuities, universal life insurance products and traditional life insurance products. Its life insurance segment consists solely of the operations of United Life Insurance Company. On February 1, 2012, the Company completed a holding company reorganization of United Fire Group, Inc., United Fire & Casualty Company and UFC MergeCo, Inc. On March 28, 2011, the Company acquired Mercer Insurance Group, Inc. (Mercer Insurance Group).

About Selective Insurance Group

Selective Insurance Group, Inc. is a holding company. As of December 31, 2016, the Company had 10 insurance subsidiaries, nine of which were licensed by various state departments of insurance to write specific lines of property and casualty insurance business. The remaining subsidiary is authorized by various state insurance departments to write property and casualty insurance in the excess and surplus lines (E&S) market. Its segments include Standard Commercial Lines, which consists of insurance products and services provided in the standard marketplace; Standard Personal Lines, which consists of insurance products and services, including flood insurance coverage that it writes through the National Flood Insurance Program (NFIP); E&S Line s, which consists of insurance products and services provided to customers not obtaining coverage in the standard marketplace, and investment segment invests insurance premiums, as well as amounts generated through its capital management strategies.

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