Contrasting AMERISAFE (NASDAQ:AMSF) & Hannover Ruck (OTCMKTS:HVRRY)

AMERISAFE (NASDAQ:AMSF) and Hannover Ruck (OTCMKTS:HVRRY) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, dividends, earnings, analyst recommendations, profitability and risk.

Analyst Recommendations

This is a summary of recent ratings for AMERISAFE and Hannover Ruck, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AMERISAFE	1	2	2	0	2.20
Hannover Ruck	0	1	0	1	3.00

AMERISAFE presently has a consensus target price of $35.67, suggesting a potential upside of 42.34%. Given AMERISAFE’s higher probable upside, equities research analysts clearly believe AMERISAFE is more favorable than Hannover Ruck.

Dividends

AMERISAFE pays an annual dividend of $1.64 per share and has a dividend yield of 6.5%. Hannover Ruck pays an annual dividend of $1.76 per share and has a dividend yield of 3.4%. AMERISAFE pays out 66.1% of its earnings in the form of a dividend. Hannover Ruck pays out 43.6% 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 12 consecutive years. AMERISAFE is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

AMERISAFE has a beta of 0.24, suggesting that its share price is 76% less volatile than the S&P 500. Comparatively, Hannover Ruck has a beta of 0.17, suggesting that its share price is 83% less volatile than the S&P 500.

Profitability

This table compares AMERISAFE and Hannover Ruck’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AMERISAFE	14.00%	14.87%	3.35%
Hannover Ruck	9.33%	18.00%	3.48%

Institutional & Insider Ownership

97.4% of AMERISAFE shares are held by institutional investors. Comparatively, 0.0% of Hannover Ruck shares are held by institutional investors. 1.9% of AMERISAFE shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares AMERISAFE and Hannover Ruck”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AMERISAFE	$317.25 million	1.46	$47.15 million	$2.48	10.10
Hannover Ruck	$30.30 billion	1.23	$2.99 billion	$4.04	12.75

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

About AMERISAFE

AMERISAFE, Inc., an insurance holding company, underwrites workers’ compensation insurance in the United States. The company provides benefits to injured employees for temporary or permanent disability, death, and medical and hospital expenses. It sells its products through retail and wholesale brokers and agents; and small and mid-sized employers engaged in hazardous industries, including construction, trucking, logging and lumber, agriculture, manufacturing, telecommunications, and maritime. AMERISAFE, Inc. was incorporated in 1985 and is based in DeRidder, Louisiana.

About Hannover Ruck

Hannover Rück SE, together with its subsidiaries, provides reinsurance products and services in Germany, the United Kingdom, France, Europe, the United States, Asia, Australia, Africa, and internationally. It operates through Property & Casualty Reinsurance; and Life & Health Reinsurance segments. The company provides property and casualty reinsurance solutions for agricultural, livestock, and bloodstock; aviation and space; catastrophe XL; credit, surety, and political risks; facultative; and marine and offshore energy businesses, as well as insurance-linked securities and structured reinsurance. It offers risk solutions in the areas of critical illness, disability, health, longevity, long term care, and mortality. In addition, the company offers group life, retirement, lifestyle, credit life, and Takaful reinsurance products. Further, the company provides various financial solutions, including new-business financing; monetization of embedded value; reserve and solvency relief; and reinsurance and solvency II businesses. The company was formerly known as Hannover Rückversicherung AG and changed its name to Hannover Rück SE in March 2013. Hannover Rück SE was founded in 1966 and is based in Hanover, Germany. Hannover Rück SE operates as a subsidiary of Talanx AG.