Financial Survey: RenaissanceRe (NYSE:RNR) versus HCI Group (NYSE:HCI)

HCI Group (NYSE:HCI) and RenaissanceRe (NYSE:RNR) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, risk, analyst recommendations, dividends, earnings, institutional ownership and valuation.

Risk and Volatility

HCI Group has a beta of 0.96, meaning that its share price is 4% less volatile than the S&P 500. Comparatively, RenaissanceRe has a beta of 0.11, meaning that its share price is 89% less volatile than the S&P 500.

Valuation and Earnings

This table compares HCI Group and RenaissanceRe”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HCI Group	$900.95 million	2.78	$299.01 million	$23.20	8.67
RenaissanceRe	$12.85 billion	1.11	$2.68 billion	$34.78	10.11

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

Analyst Ratings

This is a breakdown of recent ratings for HCI Group and RenaissanceRe, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HCI Group	0	1	5	1	3.00
RenaissanceRe	1	12	5	0	2.22

HCI Group currently has a consensus target price of $241.67, indicating a potential upside of 20.19%. RenaissanceRe has a consensus target price of $343.69, indicating a potential downside of 2.29%. Given HCI Group’s stronger consensus rating and higher possible upside, research analysts clearly believe HCI Group is more favorable than RenaissanceRe.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
HCI Group	32.60%	28.80%	12.25%
RenaissanceRe	16.25%	21.13%	4.21%

Institutional & Insider Ownership

87.0% of HCI Group shares are held by institutional investors. Comparatively, 100.0% of RenaissanceRe shares are held by institutional investors. 18.5% of HCI Group shares are held by company insiders. Comparatively, 2.3% of RenaissanceRe shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments 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 0.8%. RenaissanceRe pays an annual dividend of $1.64 per share and has a dividend yield of 0.5%. HCI Group pays out 6.9% of its earnings in the form of a dividend. RenaissanceRe pays out 4.7% 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. RenaissanceRe has raised its dividend for 30 consecutive years.

Summary

HCI Group beats RenaissanceRe on 10 of the 17 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 RenaissanceRe

RenaissanceRe Holdings Ltd., together with its subsidiaries, provides reinsurance and insurance products in the United States and internationally. The company operates through Property, and Casualty and Specialty segments. The Property segment writes property catastrophe excess of loss reinsurance and excess of loss reinsurance to insure insurance and reinsurance companies against natural and man-made catastrophes, including hurricanes, earthquakes, typhoons, and tsunamis, as well as winter storms, freezes, floods, fires, windstorms, tornadoes, explosions, and acts of terrorism; and other property class of products, such as proportional reinsurance, property per risk, property reinsurance, binding facilities, and regional U.S. multi-line reinsurance. The Casualty and Specialty segment writes various classes of products, such as directors and officers, medical malpractice, and professional indemnity; automobile and employer’s liability, casualty clash, umbrella or excess casualty, workers’ compensation, and general liability; financial and mortgage guaranty, political risk, surety, and trade credit; and accident and health, agriculture, aviation, cyber, energy, marine, satellite, and terrorism. It distributes products and services primarily through intermediaries. The company invests in and manages funds. RenaissanceRe Holdings Ltd. was founded in 1993 and is headquartered in Pembroke, Bermuda.