Financial Analysis: Intact Financial (OTCMKTS:IFCZF) and Insurance Australia Group (OTCMKTS:IAUGY)

Insurance Australia Group (OTCMKTS:IAUGY) and Intact Financial (OTCMKTS:IFCZF) are both financial services companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, valuation, institutional ownership, analyst recommendations, profitability, dividends and earnings.

Profitability

This table compares Insurance Australia Group and Intact Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Insurance Australia Group	N/A	N/A	N/A
Intact Financial	12.02%	19.54%	5.76%

Analyst Recommendations

This is a summary of current ratings and recommmendations for Insurance Australia Group and Intact Financial, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Insurance Australia Group	0	0	0	0	0.00
Intact Financial	0	0	5	0	3.00

Dividends

Insurance Australia Group pays an annual dividend of $1.86 per share and has a dividend yield of 6.7%. Intact Financial pays an annual dividend of $4.31 per share and has a dividend yield of 2.2%. Insurance Australia Group pays out 69.3% of its earnings in the form of a dividend. Intact Financial pays out 31.7% 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 & Valuation

This table compares Insurance Australia Group and Intact Financial”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Insurance Australia Group	N/A	N/A	N/A	$2.68	10.40
Intact Financial	$20.46 billion	1.69	$2.41 billion	$13.59	14.38

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

Summary

Intact Financial beats Insurance Australia Group on 9 of the 10 factors compared between the two stocks.

About Insurance Australia Group

Insurance Australia Group Limited underwrites general insurance products and provides investment management services in Australia and New Zealand. It offers personal and commercial insurance products, including bicycle, comprehensive motor, commercial and motor fleet, commercial property and liability, construction and engineering, consumer credit, compulsory third party, directors and officers, extended warranty, farm, crop, livestock, home and contents, income protection, marine, veteran, vintage and classic car, boat, caravan, travel, life, professional indemnity, public and product liability, security, workers' compensation, motor vehicle, personal liability, business, and rural and horticultural, as well as reinsurance. The company sells its products through branches and agencies, call centers, online, brokers, agents, authorized representatives and partners, and financial institutions; and third parties under the NRMA Insurance, SGIO, SGIC, RACV, CGU, ROLLiN, WFI, Swann Insurance, NZI, State, AMI, Lumley, and Coles Insurance brands. The company was formerly known as NRMA Insurance Group Limited and changed its name to Insurance Australia Group Limited in 2002. Insurance Australia Group Limited was founded in 1920 and is based in Sydney, Australia.

About Intact Financial

Intact Financial Corporation, through its subsidiaries, provides property and casualty insurance products to individuals and businesses in Canada, the United States, the United Kingdom, and internationally. The company offers insurance, such as personal auto which provides coverage from accidents, third party liability, and physical damage; personal property which provides protection for homes and contents from risks, including fire, theft, vandalism, water damages, other damages, and personal liability; and commercial line and specialty line insurance which provides commercial auto, property, and liability coverages. It also provides pet and business insurance, as well as provides risk management solutions. The company serves its products to accident and health, technology, ocean and inland marine, builder's risk, and entertainment, as well as financial services and institutions; and various products to specialty property, surety, tuition reimbursement, management liability, and cyber and environmental institutions. It offers specialty insurance products including travel insurance, brokers, direct to consumer, agencies, wholesalers, affinity group, Intact Prestige, and managing general agent platform. The company was formerly known as ING Canada Inc. and changed its name to Intact Financial Corporation in 2009. Intact Financial Corporation was founded in 1809 and is based in Toronto, Canada.