Employers Holdings (EIG) & Its Rivals Critical Review

Employers Holdings (NYSE: EIG) is one of 92 publicly-traded companies in the “Property & Casualty Insurance” industry, but how does it contrast to its peers? We will compare Employers Holdings to similar businesses based on the strength of its dividends, risk, valuation, institutional ownership, profitability, analyst recommendations and earnings.

Institutional and Insider Ownership

77.4% of Employers Holdings shares are held by institutional investors. Comparatively, 59.7% of shares of all “Property & Casualty Insurance” companies are held by institutional investors. 4.0% of Employers Holdings shares are held by insiders. Comparatively, 15.6% of shares of all “Property & Casualty Insurance” companies are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Employers Holdings and its peers top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue NetIncome Price/Earnings Ratio
Employers Holdings $779.80 million $106.70 million 14.92
Employers Holdings Competitors $11.51 billion $1.16 billion 225.33

Employers Holdings’ peers have higher revenue and earnings than Employers Holdings. Employers Holdings is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Profitability

This table compares Employers Holdings and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Employers Holdings 13.32% 10.39% 2.40%
Employers Holdings Competitors 9.30% 3.85% 2.31%

Risk & Volatility

Employers Holdings has a beta of 1.13, suggesting that its stock price is 13% more volatile than the S&P 500. Comparatively, Employers Holdings’ peers have a beta of 0.92, suggesting that their average stock price is 8% less volatile than the S&P 500.

Dividends

Employers Holdings pays an annual dividend of $0.60 per share and has a dividend yield of 1.3%. Employers Holdings pays out 18.8% of its earnings in the form of a dividend. As a group, “Property & Casualty Insurance” companies pay a dividend yield of 1.3% and pay out 13.3% of their earnings in the form of a dividend. Employers Holdings lags its peers as a dividend stock, given its lower dividend yield and higher payout ratio.

Analyst Ratings

This is a breakdown of current ratings for Employers Holdings and its peers, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Employers Holdings 1 1 1 0 2.00
Employers Holdings Competitors 629 2323 2198 45 2.32

Employers Holdings currently has a consensus price target of $44.50, suggesting a potential downside of 6.51%. As a group, “Property & Casualty Insurance” companies have a potential upside of 6.18%. Given Employers Holdings’ peers stronger consensus rating and higher possible upside, analysts plainly believe Employers Holdings has less favorable growth aspects than its peers.

Summary

Employers Holdings peers beat Employers Holdings on 10 of the 15 factors compared.

Employers Holdings Company Profile

Employers Holdings, Inc. is a holding company. Through its insurance subsidiaries, the Company provides workers’ compensation insurance coverage to select, small businesses in low to medium hazard industries. It provides workers’ compensation insurance under a statutory system wherein employers are required to provide coverage for their employees’ medical, disability, vocational rehabilitation, and/or death benefit costs for work-related injuries or illnesses. As of December 31, 2016 the Company provided workers’ compensation insurance in 36 states and the District of Columbia, with a concentration in California. Its insurance subsidiaries include Employers Insurance Company of Nevada (EICN), Employers Compensation Insurance Company (ECIC), Employers Preferred Insurance Company (EPIC) and Employers Assurance Company (EAC). The Company’s insurance products are jointly offered and marketed with and through its partners and alliances.

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