Financial Survey: American Coastal Insurance (NASDAQ:ACIC) vs. RLI (NYSE:RLI)

RLI (NYSE:RLI) and American Coastal Insurance (NASDAQ:ACIC) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, earnings, dividends, institutional ownership, analyst recommendations, risk and profitability.

Profitability

This table compares RLI and American Coastal Insurance’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
RLI	22.22%	17.61%	5.03%
American Coastal Insurance	30.31%	27.95%	8.20%

Volatility and Risk

RLI has a beta of 0.36, suggesting that its share price is 64% less volatile than the S&P 500. Comparatively, American Coastal Insurance has a beta of -0.51, suggesting that its share price is 151% less volatile than the S&P 500.

Earnings & Valuation

This table compares RLI and American Coastal Insurance”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RLI	$1.97 billion	2.66	$403.34 million	$4.76	12.00
American Coastal Insurance	$335.44 million	1.50	$106.84 million	$2.01	5.29

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

Institutional & Insider Ownership

77.9% of RLI shares are held by institutional investors. Comparatively, 22.1% of American Coastal Insurance shares are held by institutional investors. 2.4% of RLI shares are held by insiders. Comparatively, 49.2% of American Coastal Insurance shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and target prices for RLI and American Coastal Insurance, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RLI	2	3	1	0	1.83
American Coastal Insurance	0	3	1	0	2.25

RLI currently has a consensus target price of $62.00, suggesting a potential upside of 8.54%. American Coastal Insurance has a consensus target price of $13.00, suggesting a potential upside of 22.30%. Given American Coastal Insurance’s stronger consensus rating and higher possible upside, analysts clearly believe American Coastal Insurance is more favorable than RLI.

Summary

RLI beats American Coastal Insurance on 7 of the 13 factors compared between the two stocks.

About RLI

RLI Corp., an insurance holding company, underwrites property and casualty insurance. 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. It also offers coverages for security guards and environmental liability for underground storage tanks, contractors and asbestos, and environmental remediation specialists; and professional liability coverages for errors and omission coverage for small to medium-sized design, technical, computer, and miscellaneous professionals. This segment provides commercial automobile liability and physical damage insurance to local, intermediate and long haul truckers, public transportation entities, and other types of specialty commercial automobile risks; incidental and related insurance coverages; inland marine coverages; management liability coverages, such as directors and officers liability insurance, fiduciary liability and coverages, employment practice liability, and for various classes of risks, including public and private businesses; 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 commercial surety bonds for medium to large-sized businesses; small bonds for businesses and individuals; and bonds for small to medium-sized contractors. The company also engages in various reinsurance coverages. It markets its products through branch offices, wholesale and retail brokers, carrier partners, and underwriting and independent agents. RLI Corp. was incorporated in 1965 and is headquartered in Peoria, Illinois.

About American Coastal Insurance

American Coastal Insurance Corporation operates as a property and casualty insurance holding company that sources, writes, and services residential personal and commercial property, and casualty insurance policies in the United States. The company offers structure, content, and liability coverage for standard single-family homeowners, renters, and condominium unit owners. It also provides commercial multi-peril property insurance for residential condominium associations and apartments, as well as loss or damage to buildings, inventory, and equipment caused by fire, wind, hail, water, theft, and vandalism. In addition, the company offers equipment breakdown, identity theft, cyber security, and flood policies. The company markets and distributes its products through a network of independent agencies. The company was formerly known as United Insurance Holdings Corp. and changed its name to American Coastal Insurance Corporation in August 2023. American Coastal Insurance Corporation was founded in 1999 and is headquartered in Saint Petersburg, Florida.