Comparing Heritage Insurance (NYSE:HRTG) & Root (NASDAQ:ROOT)

Heritage Insurance (NYSE:HRTGGet Free Report) and Root (NASDAQ:ROOTGet Free Report) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitability, risk, earnings, dividends, valuation, analyst recommendations and institutional ownership.

Profitability

This table compares Heritage Insurance and Root’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Heritage Insurance 6.16% 26.69% 2.03%
Root -32.40% -73.62% -11.83%

Valuation and Earnings

This table compares Heritage Insurance and Root’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Heritage Insurance $735.50 million 0.45 $45.31 million $1.72 6.39
Root $455.00 million 1.94 -$147.40 million ($10.23) -5.92

Heritage Insurance has higher revenue and earnings than Root. Root is trading at a lower price-to-earnings ratio than Heritage Insurance, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent recommendations and price targets for Heritage Insurance and Root, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Heritage Insurance 0 2 1 0 2.33
Root 0 5 3 0 2.38

Heritage Insurance presently has a consensus target price of $9.00, suggesting a potential downside of 18.11%. Root has a consensus target price of $16.00, suggesting a potential downside of 73.56%. Given Heritage Insurance’s higher possible upside, research analysts clearly believe Heritage Insurance is more favorable than Root.

Insider & Institutional Ownership

59.0% of Heritage Insurance shares are owned by institutional investors. Comparatively, 59.8% of Root shares are owned by institutional investors. 11.9% of Heritage Insurance shares are owned by company insiders. Comparatively, 10.3% of Root shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Volatility & Risk

Heritage Insurance has a beta of 0.89, suggesting that its stock price is 11% less volatile than the S&P 500. Comparatively, Root has a beta of 2.85, suggesting that its stock price is 185% more volatile than the S&P 500.

Summary

Heritage Insurance beats Root on 9 of the 14 factors compared between the two stocks.

About Heritage Insurance

(Get Free Report)

Heritage Insurance Holdings, Inc., through its subsidiaries, provides personal and commercial residential insurance products. The company offers personal residential insurance in Alabama, California, Connecticut, Delaware, Florida, Georgia, Hawaii, Maryland, Massachusetts, Mississippi, New Jersey, New York, North Carolina, Rhode Island, South Carolina, and Virginia; commercial residential insurance for properties in Florida, New Jersey, and New York; and licensed in the state of Pennsylvania, as well as personal residential and wind-only property insurance. It also provides restoration, emergency, and recovery services; property management, and reinsurance services; homeowners insurance products, including single-family, homeowners or duplex, and condominium owners; and dwelling fire insurance policies. In addition, the company provides personal line policies through a network of retail independent agents, wholesale agents, and a partnership with a direct agency, as well as distribute indirectly to retail locations through wholesale agency relationships. Further, it offers personal and commercial insurance policies through a network of independent agencies. The company was founded in 2012 and is headquartered in Tampa, Florida.

About Root

(Get Free Report)

Root, Inc. provides insurance products and services in the United States. The company offers automobile, homeowners, and renters insurance products. It operates a direct-to-consumer model; and serves customers primarily through mobile applications, as well as through its website. The company's direct distribution channels also cover digital, media, and referral channels, as well as distribution partners and agencies. Root, Inc. was incorporated in 2015 and is headquartered in Columbus, Ohio.

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