Analyzing Investors Title (NASDAQ:ITIC) & Horace Mann Educators (NYSE:HMN)

Horace Mann Educators (NYSE:HMN) and Investors Title (NASDAQ:ITIC) are both small-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, valuation, profitability, earnings, dividends, analyst recommendations and institutional ownership.

Dividends

Horace Mann Educators pays an annual dividend of $1.44 per share and has a dividend yield of 3.0%. Investors Title pays an annual dividend of $1.84 per share and has a dividend yield of 0.6%. Horace Mann Educators pays out 33.6% of its earnings in the form of a dividend. Investors Title pays out 8.6% 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. Horace Mann Educators has raised its dividend for 17 consecutive years. Horace Mann Educators is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

99.3% of Horace Mann Educators shares are held by institutional investors. Comparatively, 41.4% of Investors Title shares are held by institutional investors. 3.6% of Horace Mann Educators shares are held by company insiders. Comparatively, 26.0% of Investors Title shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Horace Mann Educators and Investors Title’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Horace Mann Educators	10.15%	14.08%	1.35%
Investors Title	13.80%	14.62%	11.02%

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Horace Mann Educators and Investors Title, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Horace Mann Educators	0	0	0	3	4.00
Investors Title	0	0	1	0	3.00

Horace Mann Educators presently has a consensus target price of $59.00, indicating a potential upside of 22.84%. Given Horace Mann Educators’ stronger consensus rating and higher possible upside, analysts plainly believe Horace Mann Educators is more favorable than Investors Title.

Valuation and Earnings

This table compares Horace Mann Educators and Investors Title”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Horace Mann Educators	$1.68 billion	1.16	$162.10 million	$4.28	11.22
Investors Title	$272.76 million	2.01	$35.18 million	$21.35	13.56

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

Volatility & Risk

Horace Mann Educators has a beta of 0.08, suggesting that its stock price is 92% less volatile than the S&P 500. Comparatively, Investors Title has a beta of 0.61, suggesting that its stock price is 39% less volatile than the S&P 500.

Summary

Investors Title beats Horace Mann Educators on 10 of the 18 factors compared between the two stocks.

About Horace Mann Educators

Horace Mann Educators Corporation, together with its subsidiaries, operates as an insurance holding company in the United States. The company operates through Property & Casualty, Life & Retirement, and Supplemental & Group Benefits segments. Its Property & Casualty segment offers insurance products, including private passenger auto insurance, residential home insurance, and personal umbrella insurance; and provides auto coverages including liability and collision, and property coverage for homeowners and renters. The Life & Retirement segment markets tax-qualified fixed, fixed indexed, and variable annuities; and internal revenue code for educator, which allows public school employees and employees of other tax-exempt organizations, such as not-for-profit private schools, to utilize pretax income to make periodic contributions to a qualified retirement plan. The Supplemental & Group Benefits segment offers employer-sponsored products including accident, critical illness, limited-benefit fixed indemnity insurance, term life, and short-term and long-term disability, as well as worksite direct products, such as supplemental heart, cancer, disability, and accident coverage. The company was founded in 1945 and is headquartered in Springfield, Illinois.

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.