Critical Contrast: Atlas Financial Holdings (AFH) & Infinity Property and Casualty Corporation (IPCC)

Atlas Financial Holdings (NASDAQ: AFH) and Infinity Property and Casualty Corporation (NASDAQ:IPCC) are both small-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, dividends, earnings, valuation, risk, analyst recommendations and institutional ownership.

Dividends

Infinity Property and Casualty Corporation pays an annual dividend of $2.32 per share and has a dividend yield of 2.1%. Atlas Financial Holdings does not pay a dividend. Infinity Property and Casualty Corporation pays out 49.2% of its earnings in the form of a dividend. Atlas Financial Holdings has raised its dividend for 9 consecutive years.

Risk and Volatility

Atlas Financial Holdings has a beta of 0.89, meaning that its share price is 11% less volatile than the S&P 500. Comparatively, Infinity Property and Casualty Corporation has a beta of 0.82, meaning that its share price is 18% less volatile than the S&P 500.

Profitability

This table compares Atlas Financial Holdings and Infinity Property and Casualty Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Atlas Financial Holdings 0.92% -2.57% -0.78%
Infinity Property and Casualty Corporation 3.37% 7.02% 2.03%

Analyst Recommendations

This is a breakdown of current ratings and target prices for Atlas Financial Holdings and Infinity Property and Casualty Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Atlas Financial Holdings 0 0 3 0 3.00
Infinity Property and Casualty Corporation 0 1 1 0 2.50

Atlas Financial Holdings presently has a consensus price target of $18.50, indicating a potential downside of 7.50%. Infinity Property and Casualty Corporation has a consensus price target of $99.50, indicating a potential downside of 8.29%. Given Atlas Financial Holdings’ stronger consensus rating and higher possible upside, equities research analysts clearly believe Atlas Financial Holdings is more favorable than Infinity Property and Casualty Corporation.

Earnings & Valuation

This table compares Atlas Financial Holdings and Infinity Property and Casualty Corporation’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Atlas Financial Holdings $177.58 million 1.35 $2.64 million $0.14 142.87
Infinity Property and Casualty Corporation $1.54 billion 0.77 $43.08 million $4.72 22.99

Infinity Property and Casualty Corporation has higher revenue and earnings than Atlas Financial Holdings. Infinity Property and Casualty Corporation is trading at a lower price-to-earnings ratio than Atlas Financial Holdings, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

80.3% of Atlas Financial Holdings shares are owned by institutional investors. Comparatively, 96.3% of Infinity Property and Casualty Corporation shares are owned by institutional investors. 12.7% of Atlas Financial Holdings shares are owned by company insiders. Comparatively, 3.2% of Infinity Property and Casualty Corporation shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

About Atlas Financial Holdings

Atlas Financial Holdings Inc formerly JJR VI Acquisition Corp is a Canada-based company. It is engaged in the business of providing commercial automobile insurance in the United States with a niche market orientation. The Company’s automobile insurance products provide coverage in three areas: liability, accident benefits and physical damage. Liability insurance provides coverage where the insured is responsible for an automobile accident, for the payment for injuries and property damage to third parties. Accident benefit policies or personal injury protection policies provide coverage for loss of income, medical and rehabilitation expenses for insured persons who are injured in an automobile accident, Physical damage coverages provide for the payment of damages to an insured automobile arising from a collision with another object or from other risks. In January 2013, the Company acquired Camelot Services Inc. and its insurance subsidiary, Gateway Insurance Company.

About Infinity Property and Casualty Corporation

Infinity Property and Casualty Corporation is a holding company. The Company’s segments include Personal Auto, Commercial Vehicle and Classic Collector (its segments are Personal Auto and Commercial Vehicle). The Company writes personal automobile insurance with a concentration on nonstandard automobile insurance, commercial vehicle insurance and classic collector automobile insurance. The Company offers personal and commercial automobile insurance in states, including Arizona, California, Florida and Texas. Personal Automobile is its insurance product, which provides coverage to individuals for liability to others for bodily injury and property damage and for physical damage to an insured’s own vehicle from collision and various other perils. Commercial Vehicle provides coverage to businesses for liability to others for bodily injury and property damage and for physical damage to vehicles from collision. Classic Collector provides protection for classic collectible automobiles.

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