Financial Contrast: Maiden (MHLD) and Mercury General (MCY)

Maiden (NASDAQ: MHLD) and Mercury General (NYSE:MCY) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, dividends, institutional ownership, analyst recommendations, valuation, earnings and risk.

Profitability

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This table compares Maiden and Mercury General’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Maiden	-6.01%	-19.36%	-2.47%
Mercury General	2.25%	4.77%	1.65%

Risk & Volatility

Maiden has a beta of 1.17, meaning that its share price is 17% more volatile than the S&P 500. Comparatively, Mercury General has a beta of 0.46, meaning that its share price is 54% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Maiden and Mercury General, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Maiden	0	4	0	0	2.00
Mercury General	0	0	0	0	N/A

Maiden currently has a consensus target price of $9.00, suggesting a potential upside of 9.09%. Given Maiden’s higher probable upside, analysts plainly believe Maiden is more favorable than Mercury General.

Institutional & Insider Ownership

61.9% of Maiden shares are owned by institutional investors. Comparatively, 44.4% of Mercury General shares are owned by institutional investors. 10.5% of Maiden shares are owned by company insiders. Comparatively, 34.2% of Mercury General shares are owned by company 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 & Earnings

This table compares Maiden and Mercury General’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Maiden	$2.92 billion	0.23	-$169.89 million	($2.16)	-3.82
Mercury General	$3.42 billion	0.73	$144.87 million	$1.64	27.55

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

Dividends

Maiden pays an annual dividend of $0.60 per share and has a dividend yield of 7.3%. Mercury General pays an annual dividend of $2.50 per share and has a dividend yield of 5.5%. Maiden pays out -27.8% of its earnings in the form of a dividend. Mercury General pays out 152.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Maiden has raised its dividend for 4 consecutive years and Mercury General has raised its dividend for 32 consecutive years. Maiden is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Mercury General beats Maiden on 10 of the 15 factors compared between the two stocks.

Maiden Company Profile

Maiden Holdings, Ltd., through its subsidiaries, provides reinsurance solutions to regional and specialty insurers in the United States, Europe, and internationally. It operates in two segments, Diversified Reinsurance and AmTrust Reinsurance. The Diversified Reinsurance segment offers property and casualty reinsurance, including the writing of treaties on a quota share or excess of loss basis; and facultative risks, which are marketed through third-party intermediaries and on a direct basis. The AmTrust Reinsurance segment provides small commercial business insurance, including workers' compensation, commercial package, and other property and casualty insurance products; and specialty risk and extended warranty coverage for consumer and commercial goods, as well as custom designed coverages, such as accidental damage plans and payment protection plans related to the sale of consumer and commercial goods. This segment also offers specialty program comprising package products, general liability, commercial auto liability, excess and surplus lines programs, and other specialty commercial property and casualty insurance to small and middle market companies. In addition, the company offers auto and credit life insurance products through its insurer partners to retail clients. Maiden Holdings, Ltd. was founded in 2007 and is headquartered in Pembroke, Bermuda.

Mercury General Company Profile

Mercury General Corporation, together with its subsidiaries, engages in writing personal automobile insurance in the United States. The company also writes homeowners, commercial automobile, commercial property, mechanical protection, fire, and umbrella insurance. Its automobile insurance products cover collision, property damage, bodily injury, comprehensive, personal injury protection, underinsured and uninsured motorist, and other hazards; and homeowners insurance products cover dwelling, liability, personal property, fire, and other hazards. The company sells its policies through a network of independent agents, 100% owned insurance agents, and direct channels in Arizona, California, Florida, Georgia, Illinois, Nevada, New Jersey, New York, Oklahoma, Texas, and Virginia. Mercury General Corporation was founded in 1960 and is headquartered in Los Angeles, California.