Comparing Horace Mann Educators (HMN) and United Insurance (UIHC)

Horace Mann Educators (NYSE: HMN) and United Insurance (NASDAQ:UIHC) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, analyst recommendations, valuation, profitability, institutional ownership, risk and earnings.

Insider and Institutional Ownership

98.3% of Horace Mann Educators shares are owned by institutional investors. Comparatively, 28.3% of United Insurance shares are owned by institutional investors. 2.1% of Horace Mann Educators shares are owned by company insiders. Comparatively, 22.6% of United Insurance shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Horace Mann Educators and United Insurance’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Horace Mann Educators 5.56% 4.94% 0.61%
United Insurance -4.54% -2.29% -0.58%

Volatility & Risk

Horace Mann Educators has a beta of 1.16, suggesting that its share price is 16% more volatile than the S&P 500. Comparatively, United Insurance has a beta of 1.54, suggesting that its share price is 54% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings for Horace Mann Educators and United Insurance, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Horace Mann Educators 0 1 0 0 2.00
United Insurance 0 1 2 1 3.00

Horace Mann Educators presently has a consensus target price of $37.00, indicating a potential downside of 18.77%. United Insurance has a consensus target price of $18.00, indicating a potential upside of 13.14%. Given United Insurance’s stronger consensus rating and higher probable upside, analysts clearly believe United Insurance is more favorable than Horace Mann Educators.

Dividends

Horace Mann Educators pays an annual dividend of $1.10 per share and has a dividend yield of 2.4%. United Insurance pays an annual dividend of $0.24 per share and has a dividend yield of 1.5%. Horace Mann Educators pays out 71.4% of its earnings in the form of a dividend. United Insurance pays out -30.0% 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. United Insurance has raised its dividend for 8 consecutive years.

Earnings & Valuation

This table compares Horace Mann Educators and United Insurance’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Horace Mann Educators $1.13 billion 1.64 $83.76 million $1.54 29.58
United Insurance $487.12 million 1.40 $5.69 million ($0.80) -19.89

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

Summary

Horace Mann Educators beats United Insurance on 9 of the 17 factors compared between the two stocks.

About Horace Mann Educators

Horace Mann Educators Corporation (HMEC) is an insurance holding company. Through its subsidiaries, HMEC markets and underwrites personal lines of property and casualty (primarily personal lines automobile and homeowners) insurance, retirement annuities (primarily tax-qualified products) and life insurance in the United States. The Company’s operating segments include Property and Casualty segment, comprising primarily personal lines automobile and homeowners products; Retirement segment, comprising primarily tax-qualified fixed and variable annuities; Life segment life insurance, and Corporate and Other. It markets and services its products through a sales force of full-time agents supported by its Customer Contact Center. These agents sell HMEC’s products and limited additional third-party vendor products. As of December 31, 2016, its property and casualty subsidiaries and its life insurance subsidiary were licensed to write business in over 48 states and the District of Columbia.

About United Insurance

United Insurance Holdings Corp. is a property and casualty insurance holding company that sources, writes and services residential property and casualty insurance policies using a network of agents and a group of insurance subsidiaries. The Company’s insurance subsidiary is United Property & Casualty Insurance Company. Its other subsidiaries include United Insurance Management, L.C., the managing general agent that manages substantially all aspects of United Property & Casualty Insurance Company’s business; Skyway Claims Services, LLC, which provides services to its insurance affiliate; UPC Re, which provides a portion of the reinsurance protection purchased by its insurance affiliate. The Company’s principal product is homeowners’ insurance, which it offers in Connecticut, Florida, Georgia, Hawaii, Louisiana, Massachusetts, New Jersey, North Carolina, Rhode Island, South Carolina and Texas.

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