Reviewing National General (NGHC) and Axis Capital (AXS)

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National General (NYSE: AXS) and Axis Capital (NYSE:AXS) are both mid-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, valuation, risk, institutional ownership, profitability and dividends.

Risk and Volatility

National General has a beta of 0.95, suggesting that its stock price is 5% less volatile than the S&P 500. Comparatively, Axis Capital has a beta of 0.42, suggesting that its stock price is 58% less volatile than the S&P 500.

Earnings & Valuation

This table compares National General and Axis Capital’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
National General $4.43 billion 0.66 $105.84 million $1.09 25.25
Axis Capital $4.59 billion 1.03 -$368.96 million ($3.15) -17.95

National General has higher earnings, but lower revenue than Axis Capital. Axis Capital is trading at a lower price-to-earnings ratio than National General, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent recommendations for National General and Axis Capital, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
National General 0 2 4 0 2.67
Axis Capital 0 7 2 0 2.22

National General currently has a consensus price target of $29.83, suggesting a potential upside of 8.41%. Axis Capital has a consensus price target of $60.78, suggesting a potential upside of 7.48%. Given National General’s stronger consensus rating and higher possible upside, equities analysts plainly believe National General is more favorable than Axis Capital.

Insider & Institutional Ownership

48.0% of National General shares are held by institutional investors. Comparatively, 92.8% of Axis Capital shares are held by institutional investors. 3.4% of National General shares are held by company insiders. Comparatively, 2.0% of Axis Capital shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares National General and Axis Capital’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
National General 3.36% 12.35% 2.21%
Axis Capital -6.16% -3.63% -0.68%

Dividends

National General pays an annual dividend of $0.16 per share and has a dividend yield of 0.6%. Axis Capital pays an annual dividend of $1.56 per share and has a dividend yield of 2.8%. National General pays out 14.7% of its earnings in the form of a dividend. Axis Capital pays out -49.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. National General has raised its dividend for 3 consecutive years and Axis Capital has raised its dividend for 11 consecutive years. Axis Capital is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

National General beats Axis Capital on 11 of the 17 factors compared between the two stocks.

About National General

National General Holdings Corp., a specialty personal lines insurance holding company, provides various insurance products and services in the United States. The company operates in two segments, Property and Casualty, and Accident and Health. The Property and Casualty segment offers standard, preferred, and nonstandard automobile insurance products; and recreational vehicle (RV) insurance products that carry RV-specific endorsements comprising automatic personal effects coverage, optional replacement cost coverage, RV storage coverage, and full-time liability coverage. It also provides homeowners policies consisting of property and liability coverages for one-and two-family, and owner-occupied residences, as well as additional personal umbrella coverage to the homeowners. In addition, this segment offers small business automobile insurance products, which covers liability and physical damage caused by light-to-medium duty commercial vehicles; motorcycle insurance products for various types of motorcycles, as well as golf carts and all-terrain vehicles; and lender-placed insurance products, including fire, home, and flood products, as well as collateral protection insurance and guaranteed asset protection products for automobiles. The Accident and Health segment provides accident and non-major medical health insurance products, such as accident/AD&D coverage in the event of bodily injury or death due to accidental means; hospital indemnity; short term coverage post discharge from acute care/rehab center to the nursing home setting; and short-term medical plans. This segment also offers cancer/critical illness policies, stop loss programs for small and large employers, and basic dental and vision coverage products. In addition, it distributes life and health insurance to groups and individuals. The company was formerly known as American Capital Acquisition Corporation. National General Holdings Corp. was founded in 1939 and is headquartered in New York, New York.

About Axis Capital

AXIS Capital Holdings Limited, through its subsidiaries, provides various specialty insurance and reinsurance products worldwide. It operates through two segments, Insurance and Reinsurance. The Insurance segment offers property insurance for commercial buildings, residential premises, construction projects, and onshore energy installations; marine insurance covering offshore energy, cargo, liability, recreational marine, fine art, specie, hull, and war; and terrorism, aviation, credit and political risk, and liability insurance. It also provides professional lines insurance that cover directors' and officers' liability, errors and omissions liability, employment practices liability, fiduciary liability, crime, professional indemnity, cyber and privacy, medical malpractice, and other financial insurance related coverages for commercial enterprises, financial institutions, and not-for-profit organizations. In addition, this segment offers accidental death, travel, and specialty health products for employer and affinity groups, as well as accident and health reinsurance for catastrophic or per life events through wholesale and retail brokers, managing general agents, and underwriters. The Reinsurance segment offers reinsurance to insurance companies, including catastrophe; property reinsurance covering property damage and related losses resulting from natural and man-made perils; professional lines; and credit and surety. This segment also provides agriculture reinsurance; coverage for various types of construction risks and risks related to erection, testing, and commissioning of machinery and plants during the construction stage; marine, aviation, and personal accident reinsurance; and derivative based risk management products. The company was founded in 2001 and is headquartered in Pembroke, Bermuda.

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