Financial Analysis: Waterdrop (NYSE:WDH) versus Loews (NYSE:L)

Loews (NYSE:L) and Waterdrop (NYSE:WDH) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their valuation, profitability, dividends, analyst recommendations, institutional ownership, earnings and risk.

Earnings and Valuation

This table compares Loews and Waterdrop”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Loews	$17.51 billion	1.20	$1.41 billion	$6.29	16.17
Waterdrop	$379.74 million	1.85	$50.35 million	$0.17	11.38

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

Insider and Institutional Ownership

58.3% of Loews shares are owned by institutional investors. Comparatively, 2.0% of Waterdrop shares are owned by institutional investors. 19.0% of Loews shares are owned by company insiders. Comparatively, 24.6% of Waterdrop shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Loews and Waterdrop’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Loews	7.47%	7.43%	1.62%
Waterdrop	14.77%	9.07%	6.81%

Volatility and Risk

Loews has a beta of 0.73, suggesting that its share price is 27% less volatile than the S&P 500. Comparatively, Waterdrop has a beta of -0.25, suggesting that its share price is 125% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings for Loews and Waterdrop, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Loews	0	0	1	0	3.00
Waterdrop	0	2	0	0	2.00

Waterdrop has a consensus price target of $2.00, indicating a potential upside of 3.36%. Given Waterdrop’s higher probable upside, analysts plainly believe Waterdrop is more favorable than Loews.

Dividends

Loews pays an annual dividend of $0.25 per share and has a dividend yield of 0.2%. Waterdrop pays an annual dividend of $0.03 per share and has a dividend yield of 1.6%. Loews pays out 4.0% of its earnings in the form of a dividend. Waterdrop pays out 17.6% 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.

Summary

Loews beats Waterdrop on 9 of the 16 factors compared between the two stocks.

About Loews

Loews Corporation provides commercial property and casualty insurance in the United States and internationally. The company offers specialty insurance products, such as management and professional liability, and other coverage products; surety and fidelity bonds; property insurance products that include standard and excess property, marine and boiler, and machinery coverages; and casualty insurance products, such as workers' compensation, general and product liability, and commercial auto, surplus, and umbrella coverages. It also provides loss-sensitive insurance programs; and warranty, risk management, information, and claims administration services. The company markets its insurance products and services through independent agents, brokers, and managing general underwriters. In addition, the company is involved in the transportation and storage of natural gas and natural gas liquids, and hydrocarbons through natural gas pipelines covering approximately 13,455 miles of interconnected pipelines; 855 miles of NGL pipelines in Louisiana and Texas; 14 underground storage fields with an aggregate gas capacity of approximately 199.5 billion cubic feet of natural gas; and eleven salt dome caverns and related brine infrastructure for providing brine supply services. Further, the company operates a chain of 25 hotels; and develops, manufactures, and markets a range of extrusion blow-molded and injection molded plastic containers for customers in the pharmaceutical, dairy, household chemicals, food/nutraceuticals, industrial/specialty chemicals, and water and beverage/juice industries, as well as manufactures commodity and differentiated plastic resins from recycled plastic materials. Loews Corporation was incorporated in 1969 and is headquartered in New York, New York.

About Waterdrop

Waterdrop Inc., through its subsidiaries, provides online insurance brokerage services to match and connect users with related insurance products underwritten by insurance companies in the People's Republic of China. The company offers short-term health and long-term health and life insurance products and services. It also operates a medical crowdfunding platform. Waterdrop Inc. was founded in 2016 and is headquartered in Beijing, the People's Republic of China.