Independence (IHC) and Investors Heritage Capital (IHRC) Critical Review – Fairfield Current

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Independence (NYSE:IHC) and Investors Heritage Capital (OTCMKTS:IHRC) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, risk, valuation, dividends, institutional ownership, profitability and analyst recommendations.

Dividends

Independence pays an annual dividend of $0.30 per share and has a dividend yield of 0.8%. Investors Heritage Capital does not pay a dividend. Independence has increased its dividend for 7 consecutive years.

Earnings & Valuation

This table compares Independence and Investors Heritage Capital’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Independence $320.49 million 1.69 $42.04 million N/A N/A
Investors Heritage Capital $65.56 million 0.89 $2.66 million N/A N/A

Independence has higher revenue and earnings than Investors Heritage Capital.

Analyst Recommendations

This is a summary of recent ratings and target prices for Independence and Investors Heritage Capital, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Independence 0 0 0 0 N/A
Investors Heritage Capital 0 0 0 0 N/A

Profitability

This table compares Independence and Investors Heritage Capital’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Independence 11.91% 11.56% 4.88%
Investors Heritage Capital N/A N/A N/A

Institutional and Insider Ownership

18.1% of Independence shares are owned by institutional investors. 7.0% of Independence shares are owned by company insiders. Comparatively, 58.6% of Investors Heritage Capital shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

Independence beats Investors Heritage Capital on 9 of the 10 factors compared between the two stocks.

About Independence

Independence Holding Company, through its subsidiaries, engages in life and health insurance business. The company’s dental portfolio includes indemnity and PPO plans for employer groups of two or more lives, and for individuals within affinity groups; vision plans that offer a flat reimbursement amount for exams and materials; and short-term medical products for people with temporary needs for health coverage. It also provides supplemental products, including hospital indemnity, fixed indemnity limited benefit, critical illness, accident medical coverage, and life insurance products to individuals and families; and pet insurance and occupational accident insurance products. In addition, the company offers group long-term and short-term disability products to employers that provide benefit to their employees; New York short-term disability plan that offers temporary cash payments to replace wages lost; and group term life products, such as group term life, accidental death and dismemberment (AD&D), supplemental life and AD&D, and dependent life products. Independence Holding Company markets its products through independent and affiliated brokers, producers, and agents in 50 states of the United States, the District of Columbia, the Virgin Islands, and Puerto Rico. The company was founded in 1980 and is headquartered in Stamford, Connecticut. Independence Holding Company is a subsidiary of Geneve Holdings, Inc.

About Investors Heritage Capital

Investors Heritage Capital Corporation owns Investors Heritage Life Insurance Company, Investors Heritage Printing, Inc. and Investors Heritage Financial Services Group, Inc. The Company is the sole member of At Need Funding, LLC, and Heritage Funding, LLC. Its business segments are Preneed and Burial Products (Preneed), Traditional and Universal Life Products (Traditional), and Administrative and Financial Services. The Company offers a portfolio of the standard forms of participating and non-participating whole life, limited pay, endowments, split-funding, interest-sensitive whole life, guaranteed issue whole life, single premium whole life, universal life, term and group life, annuities and single premium immediate annuities. In addition, the Company writes credit life and credit accident, and health insurance on a group basis. Its traditional products consist of senior wealth transfer products, traditional life, group life, certain annuities and universal life products.

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