Selective Insurance Group (NASDAQ:SIGI) versus Employers (NYSE:EIG) Head-To-Head Analysis

Selective Insurance Group (NASDAQ:SIGI) 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, valuation, dividends, analyst recommendations, institutional ownership and profitability.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Selective Insurance Group and Employers, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Selective Insurance Group	1	4	2	0	2.14
Employers	0	2	1	0	2.33

Selective Insurance Group currently has a consensus price target of $98.50, suggesting a potential upside of 4.85%. Employers has a consensus price target of $55.00, suggesting a potential upside of 14.11%. Given Employers’ stronger consensus rating and higher probable upside, analysts clearly believe Employers is more favorable than Selective Insurance Group.

Institutional and Insider Ownership

82.9% of Selective Insurance Group shares are owned by institutional investors. Comparatively, 80.5% of Employers shares are owned by institutional investors. 1.5% of Selective Insurance Group shares are owned by company insiders. Comparatively, 1.5% of Employers 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.

Risk and Volatility

Selective Insurance Group has a beta of 0.56, meaning that its share price is 44% less volatile than the S&P 500. Comparatively, Employers has a beta of 0.24, meaning that its share price is 76% less volatile than the S&P 500.

Dividends

Selective Insurance Group pays an annual dividend of $1.40 per share and has a dividend yield of 1.5%. Employers pays an annual dividend of $1.20 per share and has a dividend yield of 2.5%. Selective Insurance Group pays out 38.3% of its earnings in the form of a dividend. Employers pays out 25.4% 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. Employers is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation and Earnings

This table compares Selective Insurance Group and Employers”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Selective Insurance Group	$4.23 billion	1.35	$365.24 million	$3.66	25.67
Employers	$869.30 million	1.41	$118.10 million	$4.72	10.21

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

Profitability

This table compares Selective Insurance Group and Employers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Selective Insurance Group	5.12%	8.75%	1.96%
Employers	13.76%	9.95%	2.79%

Summary

Employers beats Selective Insurance Group on 9 of the 15 factors compared between the two stocks.

About Selective Insurance Group

Selective Insurance Group, Inc., together with its subsidiaries, provides insurance products and services in the United States. The company operates through four segments: Standard Commercial Lines, Standard Personal Lines, E&S Lines, and Investments. It offers casualty insurance products that covers the financial consequences of employee injuries in the course of employment and bodily injury and/or property damage to a third party; property insurance products, which covers the accidental loss of an insured's real property, personal property, and/or earnings due to the property's loss; and flood insurance products. The company also invests in fixed income investments and commercial mortgage loans, as well as equity securities, short-term investments, and alternative investments, and other investments. It offers its insurance products and services to businesses, non-profit organizations, local government agencies, and individuals through independent retail agents and wholesale general agents. The company was founded in 1926 and is headquartered in Branchville, New Jersey.

About Employers

Employers Holdings, Inc., through its subsidiaries, operates in the commercial property and casualty insurance industry primarily in the United States. The company operates in two segments, Employers and Cerity. It offers workers’ compensation insurance to small businesses in low to medium hazard industries under the Employers and Cerity brands. The company markets its products through local, regional, and national agents and brokers; alternative distribution channels; and national, regional, and local trade groups and associations, as well as directly to customers. Employers Holdings, Inc. was founded in 2000 and is based in Henderson, Nevada.