Contrasting Bowhead Specialty (NYSE:BOW) & Heritage Insurance (NYSE:HRTG)

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

Risk and Volatility

Bowhead Specialty has a beta of -0.88, meaning that its stock price is 188% less volatile than the S&P 500. Comparatively, Heritage Insurance has a beta of 0.98, meaning that its stock price is 2% less volatile than the S&P 500.

Institutional & Insider Ownership

59.0% of Heritage Insurance shares are owned by institutional investors. 15.2% of Heritage Insurance 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.

Valuation and Earnings

This table compares Bowhead Specialty and Heritage Insurance”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bowhead Specialty	$425.66 million	2.02	$38.24 million	$1.47	17.85
Heritage Insurance	$841.67 million	0.93	$61.54 million	$3.47	7.30

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

Analyst Ratings

This is a summary of current recommendations and price targets for Bowhead Specialty and Heritage Insurance, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bowhead Specialty	0	4	5	0	2.56
Heritage Insurance	0	2	2	0	2.50

Bowhead Specialty presently has a consensus target price of $35.67, suggesting a potential upside of 35.92%. Heritage Insurance has a consensus target price of $31.50, suggesting a potential upside of 24.41%. Given Bowhead Specialty’s stronger consensus rating and higher probable upside, analysts plainly believe Bowhead Specialty is more favorable than Heritage Insurance.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Bowhead Specialty	10.05%	13.25%	2.94%
Heritage Insurance	12.71%	33.36%	4.46%

Summary

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

About Bowhead Specialty

Bowhead Specialty Holdings Inc. provides specialty property and casualty insurance products in the United States. It underwrites casualty insurance solutions for risks in the construction, distribution, heavy manufacturing, real estate, and hospitality segments; professional liability insurance solutions for financial institutions, private and public directors and officers liability insurance, errors and omissions liability insurance, and cyber segments; and healthcare solutions for hospitals, senior care providers, managed care organizations, miscellaneous medical facilities, and healthcare management liability segments. The company distributes its products through distribution partners in wholesale and retail markets. Bowhead Specialty Holdings Inc. was formerly known as Bowhead Holdings Inc. and changed its name to Bowhead Specialty Holdings Inc. in March 2024. The company was founded in 2020 and is based in New York, New York. Bowhead Specialty Holdings Inc. operates as a subsidiary of Bowhead Insurance Holdings LP.

About Heritage Insurance

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.