Reviewing Employers (NYSE:EIG) & Selective Insurance Group (NASDAQ:SIGI)

Employers (NYSE:EIG) and Selective Insurance Group (NASDAQ:SIGI) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, profitability, institutional ownership, dividends, valuation and risk.

Institutional & Insider Ownership

80.5% of Employers shares are held by institutional investors. Comparatively, 82.9% of Selective Insurance Group shares are held by institutional investors. 1.5% of Employers shares are held by insiders. Comparatively, 1.5% of Selective Insurance Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Risk & Volatility

Employers has a beta of 0.24, suggesting that its stock price is 76% less volatile than the S&P 500. Comparatively, Selective Insurance Group has a beta of 0.56, suggesting that its stock price is 44% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings for Employers and Selective Insurance Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Employers	0	2	1	0	2.33
Selective Insurance Group	1	4	2	0	2.14

Employers presently has a consensus price target of $55.00, suggesting a potential upside of 13.57%. Selective Insurance Group has a consensus price target of $98.50, suggesting a potential upside of 2.85%. Given Employers’ stronger consensus rating and higher possible upside, research analysts plainly believe Employers is more favorable than Selective Insurance Group.

Profitability

This table compares Employers and Selective Insurance Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Employers	13.76%	9.95%	2.79%
Selective Insurance Group	5.12%	8.75%	1.96%

Dividends

Employers pays an annual dividend of $1.20 per share and has a dividend yield of 2.5%. Selective Insurance Group pays an annual dividend of $1.40 per share and has a dividend yield of 1.5%. Employers pays out 25.4% of its earnings in the form of a dividend. Selective Insurance Group pays out 24.7% 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.

Earnings and Valuation

This table compares Employers and Selective Insurance Group”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Employers	$869.30 million	1.41	$118.10 million	$4.72	10.26
Selective Insurance Group	$4.55 billion	1.28	$365.24 million	$5.66	16.92

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

Summary

Selective Insurance Group beats Employers on 8 of the 15 factors compared between the two stocks.

About Employers

Employers Holdings, Inc., through its subsidiaries, operates in the commercial property and casualty insurance industry primarily in the United States. The company operates in two segments, Employers and Cerity. It offers workers’ compensation insurance to small businesses in low to medium hazard industries under the Employers and Cerity brands. The company markets its products through local, regional, and national agents and brokers; alternative distribution channels; and national, regional, and local trade groups and associations, as well as directly to customers. Employers Holdings, Inc. was founded in 2000 and is based in Henderson, Nevada.

About Selective Insurance Group

Selective Insurance Group, Inc., together with its subsidiaries, provides insurance products and services in the United States. The company operates through four segments: Standard Commercial Lines, Standard Personal Lines, E&S Lines, and Investments. It offers casualty insurance products that covers the financial consequences of employee injuries in the course of employment and bodily injury and/or property damage to a third party; property insurance products, which covers the accidental loss of an insured's real property, personal property, and/or earnings due to the property's loss; and flood insurance products. The company also invests in fixed income investments and commercial mortgage loans, as well as equity securities, short-term investments, and alternative investments, and other investments. It offers its insurance products and services to businesses, non-profit organizations, local government agencies, and individuals through independent retail agents and wholesale general agents. The company was founded in 1926 and is headquartered in Branchville, New Jersey.