Contrasting Goosehead Insurance (NASDAQ:GSHD) & Hippo (NYSE:HIPO)

Goosehead Insurance (NASDAQ:GSHD) and Hippo (NYSE:HIPO) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, earnings, profitability, institutional ownership, valuation and analyst recommendations.

Earnings and Valuation

This table compares Goosehead Insurance and Hippo”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Goosehead Insurance	$365.30 million	4.46	$27.83 million	$1.04	42.78
Hippo	$468.60 million	1.43	$57.70 million	$2.14	12.07

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

Analyst Recommendations

This is a summary of current recommendations and price targets for Goosehead Insurance and Hippo, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Goosehead Insurance	0	6	7	0	2.54
Hippo	0	3	4	0	2.57

Goosehead Insurance currently has a consensus price target of $77.60, indicating a potential upside of 74.42%. Hippo has a consensus price target of $37.25, indicating a potential upside of 44.18%. Given Goosehead Insurance’s higher probable upside, equities analysts plainly believe Goosehead Insurance is more favorable than Hippo.

Institutional and Insider Ownership

43.0% of Hippo shares are held by institutional investors. 48.4% of Goosehead Insurance shares are held by insiders. Comparatively, 10.8% of Hippo shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Risk and Volatility

Goosehead Insurance has a beta of 1.69, suggesting that its stock price is 69% more volatile than the S&P 500. Comparatively, Hippo has a beta of 1.61, suggesting that its stock price is 61% more volatile than the S&P 500.

Profitability

This table compares Goosehead Insurance and Hippo’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Goosehead Insurance	7.62%	-21.31%	7.79%
Hippo	12.31%	-2.24%	-0.48%

About Goosehead Insurance

Goosehead Insurance, Inc. operates as a holding company for Goosehead Financial, LLC that engages in the provision of personal lines insurance agency services in the United States. The company offers homeowner’s, automotive, dwelling property, flood, wind, earthquake, excess liability or umbrella, motorcycle, recreational vehicle, general liability, property, and life insurance products and services. As of December 31, 2023, it operated 1,415 franchise locations. The company was founded in 2003 and is headquartered in Westlake, Texas.

About Hippo

Hippo Holdings Inc. provides property and casualty insurance products to individuals and business customers primarily in the United States. The company operates through three segments: Services, Insurance-as-a-Service, and Hippo Home Insurance Program. Its insurance products include homeowners' insurance against risks of fire, wind, and theft, as well as other personal lines policies from third party carriers; and personal and commercial, as well as home, auto, cyber, small business, life, specialty lines, and other insurance products. The company distributes insurance products and services through its technology platform and website, as well as operates licensed insurance agencies. Hippo Holdings Inc. is headquartered in Palo Alto, California.