Head to Head Review: Enstar Group (ESGR) vs. RLI (RLI)

Enstar Group (NASDAQ:ESGR) and RLI (NYSE:RLI) are both mid-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, dividends, analyst recommendations, earnings, profitability and risk.

Risk and Volatility

Enstar Group has a beta of 0.74, meaning that its share price is 26% less volatile than the S&P 500. Comparatively, RLI has a beta of 0.93, meaning that its share price is 7% less volatile than the S&P 500.

Institutional and Insider Ownership

71.5% of Enstar Group shares are owned by institutional investors. Comparatively, 89.3% of RLI shares are owned by institutional investors. 10.0% of Enstar Group shares are owned by company insiders. Comparatively, 5.0% of RLI shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Enstar Group and RLI’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Enstar Group $823.53 million 4.63 -$150.22 million N/A N/A
RLI $818.12 million 4.31 $64.18 million $2.05 38.66

RLI has lower revenue, but higher earnings than Enstar Group.

Profitability

This table compares Enstar Group and RLI’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Enstar Group -18.24% -3.10% -0.67%
RLI 13.11% 11.36% 3.13%

Analyst Ratings

This is a breakdown of current recommendations for Enstar Group and RLI, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Enstar Group 0 0 0 0 N/A
RLI 1 3 0 0 1.75

RLI has a consensus price target of $59.00, suggesting a potential downside of 25.55%. Given RLI’s higher possible upside, analysts plainly believe RLI is more favorable than Enstar Group.

Dividends

RLI pays an annual dividend of $0.88 per share and has a dividend yield of 1.1%. Enstar Group does not pay a dividend. RLI pays out 42.9% of its earnings in the form of a dividend. RLI has increased its dividend for 42 consecutive years.

Summary

RLI beats Enstar Group on 10 of the 14 factors compared between the two stocks.

Enstar Group Company Profile

Enstar Group Limited acquires and manages insurance and reinsurance companies, and portfolios of insurance and reinsurance business in run-off. It operates in three segments: Non-Life Run-Off, Atrium, and StarStone. The Non-Life Run-Off segment engages in the running off property and casualty, and other non-life lines of businesses. It also provides consulting services, including claims inspection, claims validation, reinsurance asset collection, and IT consulting services to the insurance and reinsurance industry. The Atrium segment is involved in underwriting various classes, including marine, aviation, transit, property and casualty binding authorities, reinsurance, accident and health, and non marine direct and facultative. The StarStone segment offers a range of property, casualty, and specialty insurance products to multi-national, and small and middle-market clients. It operates in Bermuda, the United States, the United Kingdom, Continental Europe, Australia, and internationally. The company was formerly known as Castlewood Holdings Limited and changed its name to Enstar Group Limited in January 2007. Enstar Group Limited was founded in 2001 and is based in Hamilton, Bermuda.

RLI Company Profile

RLI Corp., an insurance holding company, underwrites property and casualty insurance in the United States and internationally. Its Casualty segment provides commercial and personal coverage products; and general liability products, such as coverage for third-party liability of commercial insureds, including manufacturers, contractors, apartments, and mercantile. This segment also offers coverages for security guards and in the areas of onshore energy-related businesses and environmental liability for underground storage tanks, contractors and asbestos, and environmental remediation specialists; and professional liability coverages focuses on providing errors and omission coverage to small to medium-sized design, technical, computer, and miscellaneous professionals. In addition, this segment provides commercial automobile liability and physical damage insurance to local, intermediate and long haul truckers, public transportation entities, and equipment dealers; incidental and related insurance coverages; inland marine coverages; management liability coverages, such as directors and officers liability insurance, fiduciary liability and fidelity coverages, and for low to moderate classes of risks, including public and private businesses; and healthcare liability and home business insurance products. The company's Property segment offers commercial property, cargo, hull, protection and indemnity, marine liability, inland marine, homeowners' and dwelling fire, and other property insurance products. Its Surety segment offers small bonds for businesses and individuals; bonds for small to medium-sized contractors; commercial surety bonds for medium-to-large businesses; and commercial surety bonds for the energy, petrochemical, and refining industries. The company also underwrites various reinsurance coverages. The company markets its products through branch offices and independent agents. RLI Corp. was founded in 1965 and is headquartered in Peoria, Illinois.

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