XL Group (NYSE: XL) and OneBeacon Insurance Group (NYSE:OB) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, earnings, risk, analyst recommendations, dividends, institutional ownership and profitability.
This table compares XL Group and OneBeacon Insurance Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|OneBeacon Insurance Group||0.10%||-0.12%||0.03%|
XL Group pays an annual dividend of $0.88 per share and has a dividend yield of 2.6%. OneBeacon Insurance Group pays an annual dividend of $0.84 per share and has a dividend yield of 4.6%. XL Group pays out -71.5% of its earnings in the form of a dividend. OneBeacon Insurance Group pays out 116.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. OneBeacon Insurance Group has raised its dividend for 4 consecutive years. OneBeacon Insurance Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This is a breakdown of recent ratings for XL Group and OneBeacon Insurance Group, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|OneBeacon Insurance Group||0||0||0||0||N/A|
XL Group currently has a consensus target price of $44.91, indicating a potential upside of 32.01%. Given XL Group’s higher probable upside, analysts plainly believe XL Group is more favorable than OneBeacon Insurance Group.
Insider and Institutional Ownership
99.0% of XL Group shares are held by institutional investors. Comparatively, 17.3% of OneBeacon Insurance Group shares are held by institutional investors. 3.0% of XL Group shares are held by insiders. Comparatively, 76.6% of OneBeacon Insurance Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Earnings & Valuation
This table compares XL Group and OneBeacon Insurance Group’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|XL Group||$10.55 billion||0.83||$440.96 million||($1.23)||-27.66|
|OneBeacon Insurance Group||N/A||N/A||N/A||$0.72||25.13|
XL Group has higher revenue and earnings than OneBeacon Insurance Group. XL Group is trading at a lower price-to-earnings ratio than OneBeacon Insurance Group, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
XL Group has a beta of 1, indicating that its stock price has a similar volatility profile to the S&P 500.Comparatively, OneBeacon Insurance Group has a beta of 0.57, indicating that its stock price is 43% less volatile than the S&P 500.
OneBeacon Insurance Group beats XL Group on 8 of the 14 factors compared between the two stocks.
About XL Group
XL Group plc is an insurance and reinsurance company providing property, casualty and specialty products to industrial, commercial and professional firms, insurance companies and other enterprises. The Company operates through two segments: Insurance and Reinsurance. The Company’s Insurance segment is organized into four product divisions: Global Casualty (Casualty); Global Energy Property, & Construction (EPC); Global Professional (Professional), and Global Specialty (Specialty). Its insurance operations provide insurance policies for corporate risks that may require large limits, use of a captive insurance company and the need for a program of locally issued policies. The Reinsurance segment provides casualty, property risk, property catastrophe, specialty, and other reinsurance lines on a global basis with business being written on both a proportional and non-proportional treaty basis, and also on a facultative basis.
About OneBeacon Insurance Group
OneBeacon Insurance Group, Ltd. (OneBeacon) is a specialty property and casualty insurance writer that offers a range of insurance products in the United States. The Company’s segments include Specialty Products, Specialty Industries, and Investing, Financing and Corporate. As of December 31, 2016, the Specialty Products segment consisted of 10 underwriting operating segments representing an aggregation based on those that offer products, coverages and services to customers across the United States. As of December 31, 2016, the Specialty Industries segment consisted of six underwriting operating segments representing an aggregation based on those that focus on solving the needs of a particular customer or industry group. The Investing, Financing and Corporate segment includes the investing and financing activities for OneBeacon on a consolidated basis, and certain other activities conducted through the Company and its intermediate subsidiaries.
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