W. R. Berkley (WRB) and Employers (EIG) Critical Comparison

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W. R. Berkley (NYSE:WRB) and Employers (NYSE:EIG) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, analyst recommendations, institutional ownership, dividends, valuation and profitability.

Insider and Institutional Ownership

72.6% of W. R. Berkley shares are held by institutional investors. Comparatively, 78.6% of Employers shares are held by institutional investors. 22.2% of W. R. Berkley shares are held by insiders. Comparatively, 3.0% of Employers shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares W. R. Berkley and Employers’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
W. R. Berkley $7.68 billion 1.17 $549.09 million $2.46 30.05
Employers $799.30 million 1.74 $101.20 million $2.89 14.72

W. R. Berkley has higher revenue and earnings than Employers. Employers is trading at a lower price-to-earnings ratio than W. R. Berkley, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

W. R. Berkley has a beta of 0.82, meaning that its share price is 18% less volatile than the S&P 500. Comparatively, Employers has a beta of 1, meaning that its share price has a similar volatility profile to the S&P 500.

Profitability

This table compares W. R. Berkley and Employers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
W. R. Berkley 8.54% 7.25% 1.62%
Employers 15.10% 12.51% 3.05%

Dividends

W. R. Berkley pays an annual dividend of $0.60 per share and has a dividend yield of 0.8%. Employers pays an annual dividend of $0.80 per share and has a dividend yield of 1.9%. W. R. Berkley pays out 24.4% of its earnings in the form of a dividend. Employers pays out 27.7% 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. W. R. Berkley has raised its dividend for 8 consecutive years and Employers has raised its dividend for 2 consecutive years.

Analyst Recommendations

This is a summary of current recommendations for W. R. Berkley and Employers, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
W. R. Berkley 3 5 0 0 1.63
Employers 0 1 1 0 2.50

W. R. Berkley presently has a consensus price target of $71.17, indicating a potential downside of 4.13%. Employers has a consensus price target of $53.00, indicating a potential upside of 24.59%. Given Employers’ stronger consensus rating and higher probable upside, analysts clearly believe Employers is more favorable than W. R. Berkley.

Summary

Employers beats W. R. Berkley on 11 of the 17 factors compared between the two stocks.

W. R. Berkley Company Profile

W. R. Berkley Corporation, an insurance holding company, operates as a commercial lines writer in the United States and internationally. It operates through two segments, Insurance and Reinsurance. The Insurance segment underwrites commercial insurance business, including premises operations, commercial automobile, property, products liability, and professional liability lines. It also provides workers' compensation, property casualty, general liability, and excess and umbrella coverage insurance products, as well as coverages for technology, ambulatory surgery centers, chiropractors, and concierge physicians; accident and health insurance and reinsurance products; insurance for commercial risks; pollution liability and protective coverages to contractors and owners; and liquor liability and inland marine coverage for small to medium-sized insureds. In addition, this segment offers aviation insurance products; directors and officers, and surety risk products, as well as products for life sciences and travel industries; coverage for excess liability, construction wrap-ups, and completed operations; cyber risk solutions; casualty, group life, and crime-related insurance products; personal lines insurance solutions, including home, condo/co-op, and collectibles; automobile, law enforcement, public officials and educator's legal, and employment practices liability, as well as incidental medical insurance products; and at-risk and alternative risk insurance program management services. The Reinsurance segment provides other insurance companies and self-insureds with assistance in managing their net risk through reinsurance on a portfolio basis through treaty reinsurance or on an individual basis through facultative reinsurance. W. R. Berkley Corporation was founded in 1967 and is based in Greenwich, Connecticut.

Employers Company Profile

Employers Holdings, Inc., through its subsidiaries, operates in the commercial property and casualty insurance industry primarily in the United States. It offers workers' compensation insurance to small businesses in low to medium hazard industries. The company markets its products through independent local, regional, and national agents and brokers; and alternative distribution channels comprising its partners, as well as through national, regional, and local trade groups and associations. Employers Holdings, Inc. was founded in 2000 and is based in Reno, Nevada.

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