James River Group (JRVR) and Validus (VR) Critical Comparison

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James River Group (NYSE: VR) and Validus (NYSE:VR) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, profitability, dividends, earnings, analyst recommendations, valuation and risk.

Valuation and Earnings

This table compares James River Group and Validus’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
James River Group $817.63 million 1.49 $43.56 million $1.57 26.01
Validus $2.80 billion 1.93 -$47.62 million ($1.07) -63.54

James River Group has higher earnings, but lower revenue than Validus. Validus is trading at a lower price-to-earnings ratio than James River Group, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares James River Group and Validus’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
James River Group 4.88% 7.01% 1.74%
Validus -5.06% -2.69% -0.70%

Risk & Volatility

James River Group has a beta of 0.48, indicating that its share price is 52% less volatile than the S&P 500. Comparatively, Validus has a beta of 1.02, indicating that its share price is 2% more volatile than the S&P 500.

Insider & Institutional Ownership

98.6% of James River Group shares are held by institutional investors. Comparatively, 82.0% of Validus shares are held by institutional investors. 15.0% of James River Group shares are held by insiders. Comparatively, 2.3% of Validus shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Dividends

James River Group pays an annual dividend of $1.20 per share and has a dividend yield of 2.9%. Validus pays an annual dividend of $1.52 per share and has a dividend yield of 2.2%. James River Group pays out 76.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Validus pays out -142.1% of its earnings in the form of a dividend. James River Group has increased its dividend for 2 consecutive years and Validus has increased its dividend for 3 consecutive years.

Analyst Recommendations

This is a summary of recent recommendations for James River Group and Validus, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
James River Group 0 1 3 0 2.75
Validus 0 5 1 0 2.17

James River Group presently has a consensus target price of $43.75, indicating a potential upside of 7.15%. Validus has a consensus target price of $51.25, indicating a potential downside of 24.62%. Given James River Group’s stronger consensus rating and higher possible upside, research analysts clearly believe James River Group is more favorable than Validus.

Summary

James River Group beats Validus on 12 of the 17 factors compared between the two stocks.

James River Group Company Profile

James River Group Holdings, Ltd., through its subsidiaries, provides specialty insurance and reinsurance services in the United States. Its Excess and Surplus Lines segment underwrites property and liability insurance on an excess and surplus commercial lines basis in all states and the District of Columbia. This segment distributes its insurance policies primarily through wholesale insurance brokers. The company's Specialty Admitted Insurance segment provides workers' compensation coverage for residential contractors, light manufacturing operations, transportation workers, healthcare workers, and fronting and program business in North Carolina, Georgia, New Jersey, South Carolina, Pennsylvania, Massachusetts, Rhode Island, Virginia, South Carolina, and Tennessee. Its Casualty Reinsurance segment offers proportional and working layer casualty reinsurance to third parties and unaffiliated insurance companies. James River Group Holdings, Ltd. was founded in 2002 and is headquartered in Pembroke, Bermuda.

Validus Company Profile

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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