Alleghany (NYSE: PRA) and ProAssurance (NYSE:PRA) are both mid-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, profitability, valuation, dividends and risk.

Profitability

This table compares Alleghany and ProAssurance’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Alleghany 4.48% 3.51% 1.16%
ProAssurance 9.67% 6.14% 2.12%

Analyst Recommendations

This is a summary of current ratings and target prices for Alleghany and ProAssurance, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Alleghany 0 0 1 0 3.00
ProAssurance 0 5 0 0 2.00

Alleghany currently has a consensus target price of $650.00, suggesting a potential upside of 0.92%. ProAssurance has a consensus target price of $48.00, suggesting a potential downside of 2.83%. Given Alleghany’s stronger consensus rating and higher possible upside, research analysts clearly believe Alleghany is more favorable than ProAssurance.

Valuation and Earnings

This table compares Alleghany and ProAssurance’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Alleghany $6.42 billion 1.50 $90.13 million $2.04 315.72
ProAssurance $866.15 million 3.06 $107.26 million $2.02 24.46

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

Insider and Institutional Ownership

82.3% of Alleghany shares are owned by institutional investors. Comparatively, 85.8% of ProAssurance shares are owned by institutional investors. 4.0% of Alleghany shares are owned by company insiders. Comparatively, 1.8% of ProAssurance shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Volatility & Risk

Alleghany has a beta of 0.9, suggesting that its stock price is 10% less volatile than the S&P 500. Comparatively, ProAssurance has a beta of 0.6, suggesting that its stock price is 40% less volatile than the S&P 500.

Dividends

ProAssurance pays an annual dividend of $1.24 per share and has a dividend yield of 2.5%. Alleghany does not pay a dividend. ProAssurance pays out 61.4% of its earnings in the form of a dividend.

Summary

Alleghany beats ProAssurance on 9 of the 16 factors compared between the two stocks.

Alleghany Company Profile

Alleghany Corporation provides property and casualty reinsurance and insurance products in the United States and internationally. The company operates in two segments, Reinsurance and Insurance. The Reinsurance segment offers property reinsurance products, including fire, allied lines, auto physical damage, and homeowners multiple peril reinsurance products; and casualty and other reinsurance products, such as liability, medical malpractice, ocean marine and aviation, auto liability, accident and health, surety, and credit reinsurance products. This segment distributes its products and services through brokers, as well as directly to insurance and reinsurance companies. The Insurance segment underwrites specialty insurance coverages in the property, as well as umbrella/excess, general, management, and professional liability lines; and surety products comprising commercial and contract surety bonds, as well as workers' compensation insurance products. This segment distributes its products through independent wholesale insurance brokers, and retail and general insurance agents. The company also explores for and produces oil and gas; manufactures custom trailers and truck bodies for the moving and storage industry, and other markets; provides technical engineering services for pharmaceutical and biotechnology industries; and owns and manages improved and unimproved commercial land, and residential lots. In addition, it operates as a toy, and entertainment and musical instrument company; manufacturer/remanufacturer of specialty machine tools, as well as supplier of replacement parts, accessories, and services for various cutting technologies; structural steel fabricator and erector; and provider of products and services for the funeral and cemetery industries, and precast concrete markets. As of December 31, 2017, the company owned approximately 226 acres of property. Alleghany Corporation was founded in 1929 and is based in New York, New York.

ProAssurance Company Profile

ProAssurance Corporation, through its subsidiaries, provides property and casualty insurance, and reinsurance products in the United States. The company operates through Specialty Property and Casualty, Workers' Compensation, and Lloyd's Syndicate segments. It offers professional liability insurance for healthcare professionals and facilities; professional liability insurance for attorneys; liability insurance for medical technology and life sciences risks; and workers' compensation insurance for employers, groups, and associations. The company markets its products through independent agencies and brokers, as well as an internal sales force. ProAssurance Corporation was founded in 1976 and is headquartered in Birmingham, Alabama.

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