Critical Contrast: Sampo (OTCMKTS:SAXPY) versus Fairfax Financial (OTCMKTS:FRFHF)

Sampo (OTCMKTS:SAXPY) and Fairfax Financial (OTCMKTS:FRFHF) are both large-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, dividends, risk, institutional ownership, profitability, analyst recommendations and valuation.

Dividends

Sampo pays an annual dividend of $0.35 per share and has a dividend yield of 1.7%. Fairfax Financial pays an annual dividend of $15.00 per share and has a dividend yield of 0.9%. Sampo pays out 24.3% of its earnings in the form of a dividend. Fairfax Financial pays out 7.4% 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.

Analyst Ratings

This is a summary of recent recommendations and price targets for Sampo and Fairfax Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sampo	1	2	1	1	2.40
Fairfax Financial	0	3	3	0	2.50

Volatility and Risk

Sampo has a beta of 0.39, suggesting that its share price is 61% less volatile than the S&P 500. Comparatively, Fairfax Financial has a beta of 0.48, suggesting that its share price is 52% less volatile than the S&P 500.

Insider and Institutional Ownership

0.0% of Sampo shares are held by institutional investors. Comparatively, 10.4% of Fairfax Financial shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Sampo and Fairfax Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sampo	N/A	19.05%	5.71%
Fairfax Financial	14.16%	15.05%	4.26%

Earnings & Valuation

This table compares Sampo and Fairfax Financial”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sampo	$13.08 billion	8.46	$2.26 billion	$1.44	14.46
Fairfax Financial	$31.60 billion	1.10	$4.77 billion	$202.33	8.03

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

Summary

Fairfax Financial beats Sampo on 9 of the 15 factors compared between the two stocks.

About Sampo

Sampo Oyj, together with its subsidiaries, engages in the provision of non-life insurance products and services in Finland, Sweden, Norway, Denmark, Estonia, Lithuania, Latvia, and the United Kingdom. The company operates through If, Topdanmark, Hastings, Mandatum, and Holding segments. It offers property, casualty, liability, accident, sickness, household, homeowner, motor, travel, marine, aviation, transport, forest, livestock, health, workers compensation, car, van, and bike insurance services, as well as reinsurance services. The company was founded in 1909 and is based in Helsinki, Finland.

About Fairfax Financial

Fairfax Financial Holdings Limited, through its subsidiaries, provides property and casualty insurance and reinsurance, and investment management services in the United States, Canada, Asia, and internationally. The company operates through Property and Casualty Insurance and Reinsurance, Life insurance and Run-off, and Non-Insurance Companies segments. It insures against losses to property from fire, explosion, earthquake, windstorm, flood, terrorism, boiler explosion, machinery breakdown, and construction defects, as well as underwrites automobile, commercial and personal property, and crop insurance. The company also offers workers' compensation, automobile, employer's liability, accident and health, medical malpractice, professional liability, and umbrella coverage insurance products; marine, aerospace, surety risk, and other risks and liabilities insurance products; and reinsurance products. In addition, it franchises, owns, and operates restaurants; retails sports lifestyle products; provides integrated travel and travel-related financial services, as well as advanced digital tools for agriculture; owns and operates holiday resorts; originates, processes, and distributes value-added pulses and staple foods; develops, manages, and invests in hospitality real estate. The company was formerly known as Markel Financial Holdings Limited and changed its name to Fairfax Financial Holdings Limited in 1987. Fairfax Financial Holdings Limited was incorporated in 1951 and is headquartered in Toronto, Canada.