Amerisafe (NASDAQ:AMSF) and Travelers Companies (NYSE:TRV) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, risk, institutional ownership, valuation, dividends and earnings.

Volatility & Risk

Amerisafe has a beta of 0.47, suggesting that its stock price is 53% less volatile than the S&P 500. Comparatively, Travelers Companies has a beta of 1.19, suggesting that its stock price is 19% more volatile than the S&P 500.

Insider & Institutional Ownership

79.5% of Travelers Companies shares are owned by institutional investors. 1.8% of Amerisafe shares are owned by insiders. Comparatively, 0.8% of Travelers Companies shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Dividends

Amerisafe pays an annual dividend of $0.88 per share and has a dividend yield of 1.4%. Travelers Companies pays an annual dividend of $3.08 per share and has a dividend yield of 2.5%. Amerisafe pays out 28.6% of its earnings in the form of a dividend. Travelers Companies pays out 42.3% 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. Amerisafe has increased its dividend for 4 consecutive years and Travelers Companies has increased its dividend for 9 consecutive years. Travelers Companies is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of recent recommendations for Amerisafe and Travelers Companies, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Amerisafe 0 2 1 0 2.33
Travelers Companies 1 8 3 0 2.17

Amerisafe presently has a consensus price target of $64.00, indicating a potential upside of 1.62%. Travelers Companies has a consensus price target of $134.45, indicating a potential upside of 8.82%. Given Travelers Companies’ higher probable upside, analysts plainly believe Travelers Companies is more favorable than Amerisafe.

Profitability

This table compares Amerisafe and Travelers Companies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Amerisafe 14.15% 15.21% 4.33%
Travelers Companies 8.18% 10.86% 2.40%

Valuation & Earnings

This table compares Amerisafe and Travelers Companies’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Amerisafe $375.21 million 3.23 $46.23 million $3.08 20.45
Travelers Companies $28.90 billion 1.13 $2.06 billion $7.28 16.97

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

Summary

Travelers Companies beats Amerisafe on 9 of the 17 factors compared between the two stocks.

Amerisafe Company Profile

AMERISAFE, Inc., an insurance holding company, provides workers' compensation insurance in the United States. Its workers' compensation insurance policies provide benefits to injured employees for temporary or permanent disability, death, and medical and hospital expenses. The company serves small to mid-sized employers involved in construction, trucking, logging and lumber, manufacturing, agriculture, maritime, oil and gas, and other industries through agencies. AMERISAFE, Inc. was incorporated in 1985 and is based in DeRidder, Louisiana.

Travelers Companies Company Profile

The Travelers Companies, Inc., through its subsidiaries, provides a range of commercial and personal property, and casualty insurance products and services to businesses, government units, associations, and individuals in the United states and internationally. The company operates through three segments: Business Insurance, Bond & Specialty Insurance, and Personal Insurance. The Business Insurance segment offers workers' compensation, commercial automobile and property, general liability, commercial multi-peril, employers' liability, public and product liability, professional indemnity, marine, aviation, personal accident, and kidnap and ransom insurance products. This segment operates through select accounts, which serve small businesses; commercial accounts that serve mid-sized businesses; national accounts, which serve large companies; and national property and other that serve large and mid-sized customers, commercial transportation industry, and agricultural businesses, as well as markets and distributes its products through brokers, wholesale agents, program managers, and specialized retail agents. The Bond & Specialty Insurance segment provides surety, fidelity, management and professional liability, and other property and casualty insurance products. The Personal Insurance segment offers property and casualty insurance covering personal risks, primarily automobile and homeowners insurance to individuals. The company distributes its products primarily through independent agencies and brokers. The Travelers Companies, Inc. was founded in 1853 and is based in New York, New York.

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