Heritage Insurance (NYSE: HRTG) and Maiden (NASDAQ:MHLD) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, profitability, risk, institutional ownership, earnings, dividends and analyst recommendations.
Earnings & Valuation
This table compares Heritage Insurance and Maiden’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Heritage Insurance||$406.62 million||1.13||-$1.12 million||($0.08)||-216.50|
|Maiden||$2.92 billion||0.19||-$169.89 million||($2.36)||-2.82|
Heritage Insurance has higher earnings, but lower revenue than Maiden. Heritage Insurance is trading at a lower price-to-earnings ratio than Maiden, indicating that it is currently the more affordable of the two stocks.
This table compares Heritage Insurance and Maiden’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Heritage Insurance pays an annual dividend of $0.24 per share and has a dividend yield of 1.4%. Maiden pays an annual dividend of $0.60 per share and has a dividend yield of 9.0%. Heritage Insurance pays out -300.0% of its earnings in the form of a dividend. Maiden pays out -25.4% 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.
This is a summary of current ratings and target prices for Heritage Insurance and Maiden, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Heritage Insurance presently has a consensus target price of $20.75, suggesting a potential upside of 19.80%. Maiden has a consensus target price of $10.40, suggesting a potential upside of 56.39%. Given Maiden’s higher probable upside, analysts clearly believe Maiden is more favorable than Heritage Insurance.
Volatility and Risk
Heritage Insurance has a beta of 1.27, suggesting that its share price is 27% more volatile than the S&P 500. Comparatively, Maiden has a beta of 1.24, suggesting that its share price is 24% more volatile than the S&P 500.
Institutional & Insider Ownership
82.9% of Heritage Insurance shares are owned by institutional investors. Comparatively, 66.3% of Maiden shares are owned by institutional investors. 16.1% of Heritage Insurance shares are owned by company insiders. Comparatively, 10.0% of Maiden shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Heritage Insurance beats Maiden on 12 of the 16 factors compared between the two stocks.
About Heritage Insurance
Heritage Insurance Holdings, Inc. (Heritage Insurance) is a property and casualty insurance holding company. The Company provides personal and commercial residential insurance. Through its subsidiary, Heritage Property & Casualty Insurance Company (Heritage P&C), it provides personal residential insurance for single-family homeowners and condominium owners, rental property insurance and commercial residential insurance in the state of Florida and North Carolina. The Company is vertically integrated and controls or manages all aspects of insurance underwriting, customer service, actuarial analysis, distribution and claims processing and adjusting. The Company’s primary products are personal and commercial residential insurance, which it offers only in Florida. As of December 31, 2016, it marketed and wrote personal lines voluntary policies through a network of approximately 1,900 independent agents. It had 150,998 voluntary personal residential policies as of December 31, 2016.
Maiden Holdings, Ltd. (Maiden) is a holding company. The Company focuses on serving the needs of regional and specialty insurers in the United States, Europe and select other global markets by providing reinsurance solutions designed to support their capital needs. It operates through two segments: Diversified Reinsurance and AmTrust Reinsurance. The Diversified Reinsurance segment consists of a portfolio of property and casualty reinsurance business focusing on regional and specialty property, and casualty insurance companies located, primarily in the United States and Europe. AmTrust is a multinational specialty property and casualty insurance holding company with operations in the United States, Europe and Bermuda. The Company provides reinsurance through its subsidiaries, Maiden Reinsurance Ltd. and Maiden Reinsurance North America, Inc. Internationally, the Company provides insurance sales and distribution services through Maiden Global Holdings, Ltd. and its subsidiaries.
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