Allied World Assurance (OTCMKTS: AWHHF) and Loews (NYSE:L) are both mid-cap companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, risk, dividends, analyst recommendations, institutional ownership, profitability and earnings.
Institutional & Insider Ownership
86.5% of Allied World Assurance shares are held by institutional investors. Comparatively, 59.3% of Loews shares are held by institutional investors. 3.2% of Allied World Assurance shares are held by company insiders. Comparatively, 11.8% of Loews shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
This is a summary of recent recommendations and price targets for Allied World Assurance and Loews, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Allied World Assurance||0||2||0||0||2.00|
Allied World Assurance presently has a consensus price target of $24.50, indicating a potential downside of 52.47%. Loews has a consensus price target of $35.00, indicating a potential downside of 29.52%. Given Loews’ higher possible upside, analysts plainly believe Loews is more favorable than Allied World Assurance.
Earnings & Valuation
This table compares Allied World Assurance and Loews’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Allied World Assurance||N/A||N/A||N/A||$2.97||17.36|
|Loews||$13.11 billion||1.28||$654.00 million||$2.88||17.24|
Loews has higher revenue and earnings than Allied World Assurance. Loews is trading at a lower price-to-earnings ratio than Allied World Assurance, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Allied World Assurance has a beta of 0.7, suggesting that its stock price is 30% less volatile than the S&P 500. Comparatively, Loews has a beta of 0.74, suggesting that its stock price is 26% less volatile than the S&P 500.
This table compares Allied World Assurance and Loews’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Allied World Assurance||12.56%||8.96%||2.42%|
Allied World Assurance pays an annual dividend of $0.52 per share and has a dividend yield of 1.0%. Loews pays an annual dividend of $0.25 per share and has a dividend yield of 0.5%. Allied World Assurance pays out 17.5% of its earnings in the form of a dividend. Loews pays out 8.7% 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.
Allied World Assurance beats Loews on 8 of the 13 factors compared between the two stocks.
About Allied World Assurance
Allied World Assurance Company Holdings Ltd is a Germany-based holding company. It provides property, casualty and specialty insurance and reinsurance solutions to clients around the world. The Company operates in three segments: North American Insurance, Global Markets Insurance and Reinsurance. The North American Insurance segment consists of the Company’s direct insurance operations in the United States, Bermuda and Canada. The Global Markets Insurance segment includes all of the Company’s direct insurance operations outside of North America. The Company’s reinsurance segment includes the reinsurance of property, general casualty, professional liability, specialty lines and property catastrophe coverage’s written by other reinsurance companies. The Company leases space in Australia, Bermuda, Canada, Hong Kong, Ireland, Labuan, Singapore, the United Kingdom and the United States for the operation of its North American Insurance, Global Markets Insurance and Reinsurance segments.
Loews Corporation is a holding company. The Company, through its subsidiaries, is engaged in commercial property and casualty insurance; operation of offshore oil and gas drilling rigs; transportation and storage of natural gas and natural gas liquids, and operation of a chain of hotels. The Company has five segments consisted of its four individual operating subsidiaries, CNA Financial Corporation (CNA), Diamond Offshore Drilling, Inc. (Diamond Offshore), Boardwalk Pipeline Partners, LP (Boardwalk Pipeline) and Loews Hotels Holding Corporation (Loews Hotels), and the Corporate segment. CNA’s insurance products include commercial property and casualty coverages, including surety. CNA’s services include risk management, information services, warranty and claims administration. CNA’s core business, commercial property and casualty insurance operations include Specialty, Commercial and International lines of business.
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