Analyzing Universal Insurance (UVE) and Alleghany (Y)

Universal Insurance (NYSE:UVE) and Alleghany (NYSE:Y) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their dividends, profitability, institutional ownership, risk, analyst recommendations, earnings and valuation.

Profitability

This table compares Universal Insurance and Alleghany’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Universal Insurance 16.71% 29.16% 8.39%
Alleghany 4.48% 3.51% 1.16%

Analyst Recommendations

This is a breakdown of current ratings for Universal Insurance and Alleghany, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Universal Insurance 0 1 0 0 2.00
Alleghany 0 0 1 0 3.00

Universal Insurance presently has a consensus target price of $44.00, indicating a potential downside of 8.14%. Alleghany has a consensus target price of $650.00, indicating a potential downside of 0.92%. Given Alleghany’s stronger consensus rating and higher possible upside, analysts clearly believe Alleghany is more favorable than Universal Insurance.

Earnings and Valuation

This table compares Universal Insurance and Alleghany’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Universal Insurance $751.92 million 2.22 $106.93 million N/A N/A
Alleghany $6.42 billion 1.53 $90.13 million $2.04 321.60

Universal Insurance has higher earnings, but lower revenue than Alleghany.

Dividends

Universal Insurance pays an annual dividend of $0.64 per share and has a dividend yield of 1.3%. Alleghany does not pay a dividend.

Risk and Volatility

Universal Insurance has a beta of 1.79, indicating that its share price is 79% more volatile than the S&P 500. Comparatively, Alleghany has a beta of 0.9, indicating that its share price is 10% less volatile than the S&P 500.

Insider & Institutional Ownership

73.9% of Universal Insurance shares are owned by institutional investors. Comparatively, 82.2% of Alleghany shares are owned by institutional investors. 10.6% of Universal Insurance shares are owned by company insiders. Comparatively, 4.0% of Alleghany shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

Universal Insurance beats Alleghany on 8 of the 14 factors compared between the two stocks.

About Universal Insurance

Universal Insurance Holdings, Inc., together with its subsidiaries, operates as an integrated insurance holding company in the United States. The company primarily offers personal residential homeowner's insurance. It also underwrites homeowner's multi-peril insurance; and fire, commercial multi-peril, and other liability lines of business. In addition, the company offers policy and claims administration, and reinsurance intermediary services, as well as operates Universal Direct, a direct-to-consumer online platform, which enables homeowners to directly purchase, pay for, and bind homeowners' policies. It provides its products through a network of independent agents. The company was formerly known as Universal Heights, Inc. and changed its name to Universal Insurance Holdings, Inc. in January 2001. Universal Insurance Holdings, Inc. was founded in 1990 and is based in Fort Lauderdale, Florida.

About Alleghany

Alleghany Corporation provides property and casualty reinsurance and insurance products in the United States and internationally. The company operates in two segments, Reinsurance and Insurance. The Reinsurance segment offers property reinsurance products, including fire, allied lines, auto physical damage, and homeowners multiple peril reinsurance products; and casualty and other reinsurance products, such as liability, medical malpractice, ocean marine and aviation, auto liability, accident and health, surety, and credit reinsurance products. This segment distributes its products and services through brokers, as well as directly to insurance and reinsurance companies. The Insurance segment underwrites specialty insurance coverages in the property, as well as umbrella/excess, general, management, and professional liability lines; and surety products comprising commercial and contract surety bonds, as well as workers' compensation insurance products. This segment distributes its products through independent wholesale insurance brokers, and retail and general insurance agents. The company also explores for and produces oil and gas; manufactures custom trailers and truck bodies for the moving and storage industry, and other markets; provides technical engineering services for pharmaceutical and biotechnology industries; and owns and manages improved and unimproved commercial land, and residential lots. In addition, it operates as a toy, and entertainment and musical instrument company; manufacturer/remanufacturer of specialty machine tools, as well as supplier of replacement parts, accessories, and services for various cutting technologies; structural steel fabricator and erector; and provider of products and services for the funeral and cemetery industries, and precast concrete markets. As of December 31, 2017, the company owned approximately 226 acres of property. Alleghany Corporation was founded in 1929 and is based in New York, New York.

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