Third Point Reinsurance (NYSE:TPRE) versus NI (NYSE:NODK) Critical Analysis

Third Point Reinsurance (NYSE:TPRE) and NI (NASDAQ:NODK) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, dividends, profitability, analyst recommendations, valuation, earnings and institutional ownership.

Profitability

This table compares Third Point Reinsurance and NI’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Third Point Reinsurance N/A -9.20% -3.74%
NI 16.37% 12.45% 7.20%

Volatility and Risk

Third Point Reinsurance has a beta of 1.07, meaning that its share price is 7% more volatile than the S&P 500. Comparatively, NI has a beta of 0.06, meaning that its share price is 94% less volatile than the S&P 500.

Valuation and Earnings

This table compares Third Point Reinsurance and NI’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Third Point Reinsurance $370.01 million 2.50 -$317.69 million ($3.27) -3.01
NI $212.37 million 1.75 $31.08 million N/A N/A

NI has lower revenue, but higher earnings than Third Point Reinsurance.

Institutional and Insider Ownership

66.8% of Third Point Reinsurance shares are held by institutional investors. Comparatively, 20.7% of NI shares are held by institutional investors. 9.2% of Third Point Reinsurance shares are held by company insiders. Comparatively, 0.5% of NI shares are held 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.

Analyst Recommendations

This is a breakdown of current recommendations for Third Point Reinsurance and NI, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Third Point Reinsurance 0 1 0 0 2.00
NI 0 0 0 0 N/A

Third Point Reinsurance presently has a consensus price target of $13.00, indicating a potential upside of 31.98%. Given Third Point Reinsurance’s higher possible upside, research analysts clearly believe Third Point Reinsurance is more favorable than NI.

Summary

Third Point Reinsurance beats NI on 6 of the 11 factors compared between the two stocks.

Third Point Reinsurance Company Profile

Third Point Reinsurance Ltd., through its subsidiaries, provides specialty property and casualty reinsurance products to insurance and reinsurance companies worldwide. It underwrites homeowners' and commercial, workers' compensation, personal automobile, mortgage, and multi-line reinsurance products; professional, transactional, and general liability reinsurance products; and marine, travel, and extended warranty reinsurance products. The company was incorporated in 2011 and is based in Pembroke, Bermuda.

NI Company Profile

NI Holdings, Inc. underwrites property and casualty insurance products in North Dakota, South Dakota, Nebraska, Minnesota, Nevada, Arizona, and Illinois. Its products include multi-peril crop, crop hail, private passenger automobile, farm owners, homeowners, and commercial property and liability insurance policies, as well as non-standard automobile insurance products. The company distributes its insurance products through independent producers and independent agents. The company was founded in 1946 and is headquartered in Fargo, North Dakota. NI Holdings, Inc. is a subsidiary of Nodak Mutual Group, Inc.

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