Horace Mann Educators (NYSE:HMN) versus Old Republic International (NYSE:ORI) Critical Review

Horace Mann Educators (NYSE:HMN) and Old Republic International (NYSE:ORI) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, earnings, dividends, profitability, risk, valuation and analyst recommendations.

Dividends

Horace Mann Educators pays an annual dividend of $1.44 per share and has a dividend yield of 3.2%. Old Republic International pays an annual dividend of $1.26 per share and has a dividend yield of 3.4%. Horace Mann Educators pays out 36.2% of its earnings in the form of a dividend. Old Republic International pays out 33.8% 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 and Old Republic International has raised its dividend for 45 consecutive years. Old Republic International is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Horace Mann Educators and Old Republic International’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Horace Mann Educators	9.63%	14.15%	1.35%
Old Republic International	10.83%	15.71%	3.23%

Earnings & Valuation

This table compares Horace Mann Educators and Old Republic International”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Horace Mann Educators	$1.70 billion	1.08	$162.10 million	$3.98	11.46
Old Republic International	$9.14 billion	1.00	$935.40 million	$3.73	10.04

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

Analyst Recommendations

This is a breakdown of current recommendations for Horace Mann Educators and Old Republic International, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Horace Mann Educators	0	1	2	0	2.67
Old Republic International	1	1	1	1	2.50

Horace Mann Educators presently has a consensus price target of $46.50, suggesting a potential upside of 1.95%. Old Republic International has a consensus price target of $42.00, suggesting a potential upside of 12.10%. Given Old Republic International’s higher possible upside, analysts plainly believe Old Republic International is more favorable than Horace Mann Educators.

Volatility and Risk

Horace Mann Educators has a beta of 0.11, indicating that its share price is 89% less volatile than the S&P 500. Comparatively, Old Republic International has a beta of 0.63, indicating that its share price is 37% less volatile than the S&P 500.

Insider and Institutional Ownership

99.3% of Horace Mann Educators shares are held by institutional investors. Comparatively, 70.9% of Old Republic International shares are held by institutional investors. 3.6% of Horace Mann Educators shares are held by insiders. Comparatively, 1.3% of Old Republic International shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Old Republic International beats Horace Mann Educators on 11 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 Old Republic International

Old Republic International Corporation, through its subsidiaries, engages in the insurance underwriting and related services business primarily in the United States and Canada. It operates through three segments: General Insurance, Title Insurance, and Republic Financial Indemnity Group Run-off Business. The General Insurance segment offers aviation, commercial auto, commercial multi-peril, commercial property, general liability, home and auto warranty, inland marine, travel accident, and workers' compensation insurance products; and financial indemnity products for specialty coverages, including errors and omissions, fidelity, directors and officers, and surety. This segment provides its insurance products to businesses, state and local government, and other institutions in transportation, commercial construction, healthcare, education, retail and wholesale trade, forest products, energy, general manufacturing, and financial services industries. The Title Insurance segment offers lenders' and owners' policies to real estate purchasers and investors based upon searches of the public records. This segment also provides escrow closing and construction disbursement services; and real estate information products, national default management services, and various other services pertaining to real estate transfers and loan transactions. The Republic Financial Indemnity Group Run-off Business segment offers private mortgage insurance coverage that protects mortgage lenders and investors from default related losses on residential mortgage loans made primarily to homebuyers. Old Republic International Corporation was founded in 1923 and is based in Chicago, Illinois.