Head-To-Head Analysis: American Financial Group (NYSE:AFG) and Majestic Capital (OTCMKTS:MAJCQ)

American Financial Group (NYSE:AFG) and Majestic Capital (OTCMKTS:MAJCQ) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their risk, dividends, analyst recommendations, institutional ownership, valuation, earnings and profitability.

Valuation & Earnings

This table compares American Financial Group and Majestic Capital’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
American Financial Group	$7.83 billion	1.35	$852.00 million	$10.45	12.09
Majestic Capital	N/A	N/A	N/A	N/A	N/A

American Financial Group has higher revenue and earnings than Majestic Capital.

Institutional and Insider Ownership

64.4% of American Financial Group shares are held by institutional investors. 14.5% of American Financial Group shares are held by insiders. Comparatively, 14.3% of Majestic Capital shares are held by 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 American Financial Group and Majestic Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
American Financial Group	11.03%	21.34%	2.94%
Majestic Capital	N/A	N/A	N/A

Analyst Recommendations

This is a summary of current recommendations for American Financial Group and Majestic Capital, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
American Financial Group	0	2	2	0	2.50
Majestic Capital	0	0	0	0	N/A

American Financial Group presently has a consensus price target of $135.00, indicating a potential upside of 6.90%. Given American Financial Group’s higher possible upside, analysts clearly believe American Financial Group is more favorable than Majestic Capital.

Summary

American Financial Group beats Majestic Capital on 8 of the 8 factors compared between the two stocks.

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.

About Majestic Capital

Majestic Capital, Ltd., through its subsidiaries, provides workers' compensation insurance products. The company underwrites workers' compensation insurance products through independent insurance brokers and agents to various size businesses; and excess and frequency coverage policies to self-insured entities. It offers primary workers' compensation insurance to employers in Alaska, Arizona, California, Florida, Hawaii, Idaho, Illinois, Montana, Nevada, New Jersey, New Mexico, New York, Oregon, Utah, Virginia, and Washington. The company also engages in underwriting reinsurance. In addition, it offers various management services, including general management, underwriting, risk assessment, general recordkeeping, and regulatory compliance services; safety and loss control services; and claims management services to self-insured groups under fee-for-service arrangements. Further, the company acts as a broker for insurers and places the excess coverage for the groups. It serves transportation, healthcare, wholesale and retail, manufacturing, and hospitality industries; contractors; and colleges and universities. Majestic Capital, Ltd. was formerly known as CRM Holdings, Ltd. and changed its name to Majestic Capital, Ltd. in May 2010. Majestic Capital, Ltd. was founded in 1999 and is based in Hamilton, Bermuda.