Contrasting Markel (MKL) & Third Point Reinsurance (TPRE)

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

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Markel $6.84 billion 2.06 -$133.01 million $20.53 49.53
Third Point Reinsurance $939.01 million 1.12 $277.79 million $2.63 4.25

Third Point Reinsurance has lower revenue, but higher earnings than Markel. Third Point Reinsurance is trading at a lower price-to-earnings ratio than Markel, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Markel and Third Point Reinsurance, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Markel 0 1 2 0 2.67
Third Point Reinsurance 0 1 2 0 2.67

Markel currently has a consensus price target of $1,300.00, indicating a potential upside of 27.84%. Third Point Reinsurance has a consensus price target of $15.00, indicating a potential upside of 34.29%. Given Third Point Reinsurance’s higher possible upside, analysts clearly believe Third Point Reinsurance is more favorable than Markel.

Profitability

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

Net Margins Return on Equity Return on Assets
Markel -2.02% 9.04% 2.58%
Third Point Reinsurance 3.89% 1.50% 0.54%

Institutional and Insider Ownership

75.5% of Markel shares are held by institutional investors. Comparatively, 72.0% of Third Point Reinsurance shares are held by institutional investors. 2.5% of Markel shares are held by company insiders. Comparatively, 12.1% of Third Point Reinsurance shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Volatility and Risk

Markel has a beta of 0.9, suggesting that its stock price is 10% less volatile than the S&P 500. Comparatively, Third Point Reinsurance has a beta of 0.97, suggesting that its stock price is 3% less volatile than the S&P 500.

Summary

Markel beats Third Point Reinsurance on 7 of the 12 factors compared between the two stocks.

Markel Company Profile

Markel Corporation, a diverse financial holding company, markets and underwrites specialty insurance products in the United States, the United Kingdom, Canada, and internationally. It operates through three segments: U.S. Insurance, International Insurance, and Reinsurance. The U.S. Insurance segment offers general and professional liability, property, personal line, program, and workers' compensation insurance products, as well as other insurance product lines, such as ocean marine, surety, CPI, and coverages. The International Insurance segment provides professional and general liability, marine and energy, and property insurance products, as well as other insurance product lines, including crime, contingency, accident and health, specialty, short-term trade credit, and other coverages. The Reinsurance segment offers property and casualty treaty reinsurance products; and other treaty reinsurance products, including structured and whole turnover credit, political risk, mortgage, and contract and commercial surety, as well as public entity, aviation, whole account, accident and health coverage, offshore and onshore marine and energy risks, and agriculture. The company also operates as an insurance-linked securities investment fund manager and reinsurance manager; manufacturer of transportation and other industrial equipment; and a management and IT consulting firm providing services and solutions to various customers, as well as offers capital solutions to asset and wealth management firms. Markel Corporation was founded in 1930 and is headquartered in Glen Allen, Virginia.

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, workers compensation, personal automobile, mortgage, and multi-line reinsurance; professional, transactional, and general liability reinsurance; and marine, travel, and extended warranty reinsurance products. The company was incorporated in 2011 and is based in Pembroke, Bermuda.

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