Investors Title (NASDAQ:ITIC) & American Financial Group (NYSE:AFG) Head to Head Review

Investors Title (NASDAQ:ITIC) and American Financial Group (NYSE:AFG) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, earnings, dividends, analyst recommendations, institutional ownership, risk and valuation.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Investors Title and American Financial Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Investors Title	0	0	1	0	3.00
American Financial Group	0	3	2	0	2.40

American Financial Group has a consensus price target of $145.00, suggesting a potential upside of 9.11%. Given American Financial Group’s higher probable upside, analysts clearly believe American Financial Group is more favorable than Investors Title.

Insider and Institutional Ownership

41.4% of Investors Title shares are owned by institutional investors. Comparatively, 64.4% of American Financial Group shares are owned by institutional investors. 26.0% of Investors Title shares are owned by insiders. Comparatively, 16.9% of American Financial Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Investors Title and American Financial Group”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Investors Title	$272.76 million	1.79	$35.18 million	$20.10	12.85
American Financial Group	$8.17 billion	1.35	$842.00 million	$10.52	12.63

American Financial Group has higher revenue and earnings than Investors Title. American Financial Group is trading at a lower price-to-earnings ratio than Investors Title, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Investors Title has a beta of 0.65, suggesting that its stock price is 35% less volatile than the S&P 500. Comparatively, American Financial Group has a beta of 0.64, suggesting that its stock price is 36% less volatile than the S&P 500.

Dividends

Investors Title pays an annual dividend of $1.84 per share and has a dividend yield of 0.7%. American Financial Group pays an annual dividend of $3.52 per share and has a dividend yield of 2.6%. Investors Title pays out 9.2% of its earnings in the form of a dividend. American Financial Group pays out 33.5% 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. American Financial Group has raised its dividend for 19 consecutive years. American Financial Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Investors Title and American Financial Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Investors Title	13.59%	14.03%	10.62%
American Financial Group	10.76%	19.50%	2.82%

Summary

Investors Title beats American Financial Group on 9 of the 17 factors compared between the two stocks.

About Investors Title

Investors Title Company engages in the issuance of residential and commercial title insurance for residential, institutional, commercial, and industrial properties. The company underwrites land title insurance for owners and mortgagees as a primary insurer; and assumes the reinsurance of title insurance risks from other title insurance companies. It offers services in connection with tax-deferred exchanges of like-kind property; acts as a qualified intermediary in tax-deferred exchanges of property; coordinates the exchange aspects of the real estate transaction, such as drafting standard exchange documents, holding the exchange funds between the sale of the old property and the purchase of the new property, and accepting the formal identification of the replacement property. In addition, it serves as an exchange accommodation titleholder for accomplishing reverse exchanges when the taxpayers decide to acquire replacement property before selling the relinquished property. Further, the company offers investment management and trust services to individuals, companies, banks, and trusts; and consulting and management services to clients to start and operate a title insurance agency. It issues title insurance policies directly and through a network of agents in 22 states and the District of Columbia, primarily in the eastern half of the United States. Investors Title Company was founded in 1972 and is headquartered in Chapel Hill, North Carolina.

About American Financial Group

American Financial Group, Inc., an insurance holding company, provides specialty property and casualty insurance products in the United States. The company offers property and transportation insurance products, such as physical damage and liability coverage for buses and trucks, inland and ocean marine, agricultural-related products, and other commercial property and specialty transportation coverages; specialty casualty insurance, including primarily excess and surplus, executive and professional liability, general liability, umbrella and excess liability, and specialty coverage in targeted markets, as well as customized programs for small to mid-sized businesses and workers’ compensation insurance; and specialty financial insurance products comprising risk management insurance programs for lending and leasing institutions, fidelity and surety products, and trade credit insurance. It sells its property and casualty insurance products through independent insurance agents and brokers. The company was founded in 1872 and is headquartered in Cincinnati, Ohio.