Head-To-Head Comparison: Root (NASDAQ:ROOT) versus RenaissanceRe (NYSE:RNR)

RenaissanceRe (NYSE:RNR) and Root (NASDAQ:ROOT) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, earnings, analyst recommendations, dividends, profitability, institutional ownership and valuation.

Insider & Institutional Ownership

100.0% of RenaissanceRe shares are owned by institutional investors. Comparatively, 59.8% of Root shares are owned by institutional investors. 1.3% of RenaissanceRe shares are owned by company insiders. Comparatively, 11.7% of Root 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.

Volatility and Risk

RenaissanceRe has a beta of 0.29, indicating that its stock price is 71% less volatile than the S&P 500. Comparatively, Root has a beta of 2.41, indicating that its stock price is 141% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for RenaissanceRe and Root, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RenaissanceRe	2	4	5	0	2.27
Root	0	6	2	1	2.44

RenaissanceRe currently has a consensus target price of $280.80, indicating a potential upside of 16.47%. Root has a consensus target price of $102.67, indicating a potential downside of 20.87%. Given RenaissanceRe’s higher possible upside, equities analysts plainly believe RenaissanceRe is more favorable than Root.

Valuation & Earnings

This table compares RenaissanceRe and Root”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RenaissanceRe	$11.65 billion	1.01	$1.87 billion	$35.02	6.88
Root	$1.18 billion	1.68	-$147.40 million	$1.71	75.87

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
RenaissanceRe	15.99%	23.41%	4.41%
Root	-1.56%	-9.81%	-1.12%

Summary

RenaissanceRe beats Root on 10 of the 15 factors compared between the two stocks.

About RenaissanceRe

RenaissanceRe Holdings Ltd., together with its subsidiaries, provides reinsurance and insurance products in the United States and internationally. The company operates through Property, and Casualty and Specialty segments. The Property segment writes property catastrophe excess of loss reinsurance and excess of loss reinsurance to insure insurance and reinsurance companies against natural and man-made catastrophes, including hurricanes, earthquakes, typhoons, and tsunamis, as well as winter storms, freezes, floods, fires, windstorms, tornadoes, explosions, and acts of terrorism; and other property class of products, such as proportional reinsurance, property per risk, property reinsurance, binding facilities, and regional U.S. multi-line reinsurance. The Casualty and Specialty segment writes various classes of products, such as directors and officers, medical malpractice, and professional indemnity; automobile and employer’s liability, casualty clash, umbrella or excess casualty, workers’ compensation, and general liability; financial and mortgage guaranty, political risk, surety, and trade credit; and accident and health, agriculture, aviation, cyber, energy, marine, satellite, and terrorism. It distributes products and services primarily through intermediaries. The company invests in and manages funds. RenaissanceRe Holdings Ltd. was founded in 1993 and is headquartered in Pembroke, Bermuda.

About Root

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.