Universal Insurance (NYSE:UVE) versus HCI Group (NYSE:HCI) Head-To-Head Comparison

HCI Group (NYSE:HCI) and Universal Insurance (NYSE:UVE) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, risk, profitability, earnings and valuation.

Analyst Recommendations

This is a summary of current ratings and recommmendations for HCI Group and Universal Insurance, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HCI Group	0	1	4	0	2.80
Universal Insurance	0	0	1	0	3.00

HCI Group presently has a consensus target price of $140.00, suggesting a potential upside of 17.94%. Universal Insurance has a consensus target price of $25.00, suggesting a potential upside of 15.10%. Given HCI Group’s higher possible upside, equities research analysts clearly believe HCI Group is more favorable than Universal Insurance.

Risk and Volatility

HCI Group has a beta of 1.12, suggesting that its stock price is 12% more volatile than the S&P 500. Comparatively, Universal Insurance has a beta of 0.9, suggesting that its stock price is 10% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
HCI Group	21.63%	44.01%	8.33%
Universal Insurance	4.82%	15.43%	2.37%

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HCI Group	$706.97 million	1.76	$79.03 million	$11.97	9.92
Universal Insurance	$1.51 billion	0.41	$66.82 million	$2.46	8.83

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

Institutional and Insider Ownership

87.0% of HCI Group shares are owned by institutional investors. Comparatively, 66.6% of Universal Insurance shares are owned by institutional investors. 21.0% of HCI Group shares are owned by insiders. Comparatively, 17.5% of Universal Insurance shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

HCI Group pays an annual dividend of $1.60 per share and has a dividend yield of 1.3%. Universal Insurance pays an annual dividend of $0.64 per share and has a dividend yield of 2.9%. HCI Group pays out 13.4% of its earnings in the form of a dividend. Universal Insurance pays out 26.0% 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.

Summary

HCI Group beats Universal Insurance on 13 of the 16 factors compared between the two stocks.

About HCI Group

HCI Group, Inc., together with its subsidiaries, engages in the property and casualty insurance, insurance management, reinsurance, real estate, and information technology businesses in Florida. It provides residential insurance products, such as homeowners, fire, flood, and wind-only insurance to homeowners, condominium owners, and tenants for properties, as well as offers reinsurance programs. The company also owns and operates waterfront properties and retail shopping centers, and an office building, as well as commercial properties for investment purposes. In addition, it designs and develops web-based applications and products for mobile devices, including SAMS, an online policy administration platform; Harmony, a policy administration platform; ClaimColony, an end-to-end claims management platform; and AtlasViewer, a mapping and data visualization platform. The company was formerly known as Homeowners Choice, Inc. and changed its name to HCI Group, Inc. in May 2013. HCI Group, Inc. was incorporated in 2006 and is headquartered in Tampa, Florida.

About Universal Insurance

Universal Insurance Holdings, Inc., together with its subsidiaries, operates as an integrated insurance holding company in the United States. It develops, markets, and underwrites insurance products for personal residential insurance, such as homeowners, renters/tenants, condo unit owners, and dwelling/fire; and offers allied lines, coverage for other structures, and personal property, liability, and personal articles coverages. The company also advises on actuarial issues, oversees distribution, administers claims payments, performs policy administration and underwriting, and assists with reinsurance negotiations; places and manages reinsurance programs for the insurance entities; and operates Clovered.com, a digital agency for various carrier partners and utilization of digital applications for adjusting claims. It offers its products through a network of independent agents, as well as direct-to-consumer online solutions, including digital insurance agency. The company was formerly known as Universal Heights, Inc. and changed its name to Universal Insurance Holdings, Inc. in January 2001. Universal Insurance Holdings, Inc. was incorporated in 1990 and is headquartered in Fort Lauderdale, Florida.