Hannover Ruck (OTCMKTS:HVRRY) & Chubb (NYSE:CB) Critical Analysis

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

Valuation & Earnings

This table compares Chubb and Hannover Ruck”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Chubb	$59.40 billion	2.20	$10.31 billion	$28.27	11.97
Hannover Ruck	$30.30 billion	1.17	$2.99 billion	$4.04	12.12

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

Dividends

Chubb pays an annual dividend of $4.08 per share and has a dividend yield of 1.2%. Hannover Ruck pays an annual dividend of $1.76 per share and has a dividend yield of 3.6%. Chubb pays out 14.4% 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. Chubb has increased its dividend for 31 consecutive years.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Chubb and Hannover Ruck, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Chubb	1	12	7	2	2.45
Hannover Ruck	0	2	0	1	2.67

Chubb presently has a consensus target price of $360.77, indicating a potential upside of 6.62%. Given Chubb’s higher probable upside, research analysts clearly believe Chubb is more favorable than Hannover Ruck.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Chubb	18.10%	14.47%	4.19%
Hannover Ruck	9.33%	18.00%	3.48%

Insider and Institutional Ownership

83.8% of Chubb shares are owned by institutional investors. Comparatively, 0.0% of Hannover Ruck shares are owned by institutional investors. 0.4% of Chubb shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Risk and Volatility

Chubb has a beta of 0.37, indicating that its stock price is 63% less volatile than the S&P 500. Comparatively, Hannover Ruck has a beta of 0.19, indicating that its stock price is 81% less volatile than the S&P 500.

Summary

Chubb beats Hannover Ruck on 14 of the 18 factors compared between the two stocks.

About Chubb

Chubb Limited provides insurance and reinsurance products worldwide. The company's North America Commercial P&C Insurance segment offers commercial property, casualty, workers' compensation, package policies, risk management, financial lines, marine, construction, environmental, medical risk, cyber risk, surety, and casualty; and group accident and health insurance to large, middle market, and small commercial businesses. Its North America Personal P&C Insurance segment provides affluent and high net worth individuals and families with homeowners, automobile and collector cars, valuable articles, personal and excess liability, travel insurance, and recreational marine insurance and services. The company's North America Agricultural Insurance segment offers multiple peril crop and crop-hail insurance; and coverage for farm, ranch, and specialty property and casualty, and commercial agriculture products. Its Overseas General Insurance segment provides coverage for traditional commercial property and casualty; specialty categories, such as financial lines, marine, energy, aviation, political risk, and construction; and group accident and health, and traditional and specialty personal lines for corporations, middle markets, and small customers through retail brokers, agents, and other channels. The company's Global Reinsurance segment offers traditional and specialty reinsurance under the Chubb Tempest Re brand to property and casualty companies. Its Life Insurance segment provides protection and savings products comprising whole life, endowment plans, individual and life, group term life, health protection, personal accident, credit life, universal life, group employee benefits, and unit linked contracts. It markets its products primarily through insurance and reinsurance brokers. The company was formerly known as ACE Limited and changed its name to Chubb Limited in January 2016. Chubb Limited was incorporated in 1985 and is headquartered in Zurich, Switzerland.

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.