Horace Mann Educators (NYSE:HMN) and EMC Insurance Group (NASDAQ:EMCI) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, risk, dividends, institutional ownership, earnings, valuation and analyst recommendations.
Valuation and Earnings
This table compares Horace Mann Educators and EMC Insurance Group’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Horace Mann Educators||$1.17 billion||1.39||$169.45 million||$1.74||22.88|
|EMC Insurance Group||$652.29 million||0.78||$39.23 million||$1.22||19.24|
Horace Mann Educators has higher revenue and earnings than EMC Insurance Group. EMC Insurance Group is trading at a lower price-to-earnings ratio than Horace Mann Educators, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
99.3% of Horace Mann Educators shares are held by institutional investors. Comparatively, 28.2% of EMC Insurance Group shares are held by institutional investors. 2.2% of Horace Mann Educators shares are held by company insiders. Comparatively, 2.9% of EMC Insurance Group shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
This is a breakdown of current ratings for Horace Mann Educators and EMC Insurance Group, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Horace Mann Educators||0||1||0||0||2.00|
|EMC Insurance Group||0||1||1||0||2.50|
Horace Mann Educators currently has a consensus target price of $43.00, indicating a potential upside of 8.01%. EMC Insurance Group has a consensus target price of $30.50, indicating a potential upside of 29.95%. Given EMC Insurance Group’s stronger consensus rating and higher probable upside, analysts plainly believe EMC Insurance Group is more favorable than Horace Mann Educators.
Volatility & Risk
Horace Mann Educators has a beta of 0.73, indicating that its stock price is 27% less volatile than the S&P 500. Comparatively, EMC Insurance Group has a beta of 0.74, indicating that its stock price is 26% less volatile than the S&P 500.
This table compares Horace Mann Educators and EMC Insurance Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Horace Mann Educators||14.89%||5.90%||0.75%|
|EMC Insurance Group||3.23%||3.30%||1.15%|
Horace Mann Educators pays an annual dividend of $1.14 per share and has a dividend yield of 2.9%. EMC Insurance Group pays an annual dividend of $0.88 per share and has a dividend yield of 3.7%. Horace Mann Educators pays out 65.5% of its earnings in the form of a dividend. EMC Insurance Group pays out 72.1% 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. Horace Mann Educators has raised its dividend for 9 consecutive years and EMC Insurance Group has raised its dividend for 8 consecutive years.
Horace Mann Educators beats EMC Insurance Group on 10 of the 17 factors compared between the two stocks.
Horace Mann Educators Company Profile
Horace Mann Educators Corporation, through its subsidiaries, operates as a multiline insurance company in the United States. The Company operates Property and Casualty Insurance, Annuity Products, and Life Insurance segments. It underwrites and markets personal lines of property and casualty insurance, including personal lines automobile and property insurance products; retirement products, such as tax-qualified annuities; and life insurance products. The company markets its products through its sales force of full-time exclusive distributors and independent agents to K-12 teachers, administrators, and other employees of public schools and their families. Horace Mann Educators Corporation was founded in 1945 and is headquartered in Springfield, Illinois.
EMC Insurance Group Company Profile
EMC Insurance Group Inc., an insurance holding company, provides property and casualty insurance, and reinsurance products in the United States. It operates through two segments, Property and Casualty Insurance, and Reinsurance. The Property and Casualty Insurance segment underwrites commercial and personal lines of insurance products. Its commercial lines of insurance products comprise automobile, property, workers' compensation, and liability, as well as other products that provide protection with respect to burglary and theft loss, aircraft, marine, and other types of losses; and personal lines of insurance products include automobile, homeowners, and umbrella policies. The Reinsurance segment provides reinsurance for other insurers and reinsurers. EMC Insurance Group Inc. offers its products to small and medium-sized businesses, institutions, and individual consumers through independent insurance agents. The company was founded in 1974 and is based in Des Moines, Iowa. EMC Insurance Group Inc. is a subsidiary of Employers Mutual Casualty Company.
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