Head-To-Head Contrast: Hallmark Financial Services (HALL) vs. EMC Insurance Group (EMCI)

Hallmark Financial Services (NASDAQ: HALL) and EMC Insurance Group (NASDAQ:EMCI) are both small-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, institutional ownership, dividends, risk, valuation, profitability and analyst recommendations.

Earnings & Valuation

This table compares Hallmark Financial Services and EMC Insurance Group’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hallmark Financial Services $375.95 million 0.51 $6.52 million ($0.26) -40.88
EMC Insurance Group $640.91 million 0.98 $46.20 million $1.62 18.11

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

Profitability

This table compares Hallmark Financial Services and EMC Insurance Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hallmark Financial Services -1.19% -0.42% -0.09%
EMC Insurance Group 5.32% 4.99% 1.74%

Analyst Ratings

This is a breakdown of current ratings and target prices for Hallmark Financial Services and EMC Insurance Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hallmark Financial Services 0 0 0 0 N/A
EMC Insurance Group 0 1 0 0 2.00

EMC Insurance Group has a consensus price target of $32.00, suggesting a potential upside of 9.07%. Given EMC Insurance Group’s higher possible upside, analysts plainly believe EMC Insurance Group is more favorable than Hallmark Financial Services.

Volatility & Risk

Hallmark Financial Services has a beta of 0.82, indicating that its share price is 18% less volatile than the S&P 500. Comparatively, EMC Insurance Group has a beta of 0.99, indicating that its share price is 1% less volatile than the S&P 500.

Insider & Institutional Ownership

65.0% of Hallmark Financial Services shares are owned by institutional investors. Comparatively, 28.0% of EMC Insurance Group shares are owned by institutional investors. 28.7% of Hallmark Financial Services shares are owned by company insiders. Comparatively, 4.5% of EMC Insurance Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Dividends

EMC Insurance Group pays an annual dividend of $0.88 per share and has a dividend yield of 3.0%. Hallmark Financial Services does not pay a dividend. EMC Insurance Group pays out 54.3% of its earnings in the form of a dividend.

Summary

EMC Insurance Group beats Hallmark Financial Services on 11 of the 14 factors compared between the two stocks.

About Hallmark Financial Services

Hallmark Financial Services, Inc. is an insurance holding company. The Company markets, distributes, underwrites and services its property/casualty insurance products to businesses and individuals. Its business involves marketing, distributing, underwriting and servicing insurance products, as well as providing other insurance related services. Its segments include Standard Commercial Segment, Specialty Commercial Segment and Personal Segment. The Company’s Standard Commercial P&C operating unit primarily underwrites low-severity, short-tailed commercial property/casualty insurance products in the standard market. The Company reinsures a portion of the risk it underwrites in order to control the exposure to losses and to protect capital resources. Its Workers Compensation operating unit specializes in small and middle market workers compensation business. Its Specialty Commercial operating unit offers general aviation and satellite launch insurance products and services.

About EMC Insurance Group

EMC Insurance Group Inc. is an insurance holding company. The Company operates through two segments: Property and Casualty Insurance and Reinsurance segment. It conducts its property and casualty insurance operations through its subsidiaries, including EMCASCO Insurance Company, Illinois EMCASCO Insurance Company and Dakota Fire Insurance Company, and its reinsurance operations through its subsidiary, EMC Reinsurance Company. The Company focuses on the sale of commercial lines of property and casualty insurance to small and medium-sized businesses. The Company offered its insurance products in 41 states, as of December 31, 2016. The Company is owned by Employers Mutual Casualty Company (Employers Mutual), a multiple-line property and casualty insurance company. The Company’s insurance agency, EMC Underwriters, LLC (EMC Underwriters), specializes in marketing excess and surplus lines of insurance.

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