Head to Head Comparison: Heritage Insurance (NYSE:HRTG) vs. Watford (NYSE:WTRE)

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

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Heritage Insurance and Watford, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Heritage Insurance 0 1 1 0 2.50
Watford 0 3 1 0 2.25

Heritage Insurance currently has a consensus price target of $18.00, indicating a potential upside of 33.14%. Watford has a consensus price target of $29.25, indicating a potential upside of 3.36%. Given Heritage Insurance’s stronger consensus rating and higher possible upside, research analysts clearly believe Heritage Insurance is more favorable than Watford.

Dividends

Heritage Insurance pays an annual dividend of $0.24 per share and has a dividend yield of 1.8%. Watford does not pay a dividend. Heritage Insurance pays out 17.4% of its earnings in the form of a dividend.

Profitability

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

Net Margins Return on Equity Return on Assets
Heritage Insurance 3.58% 6.09% 1.43%
Watford N/A N/A N/A

Institutional and Insider Ownership

67.5% of Heritage Insurance shares are owned by institutional investors. Comparatively, 12.4% of Watford shares are owned by institutional investors. 12.0% of Heritage Insurance shares are owned by company insiders. Comparatively, 16.6% of Watford 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 Heritage Insurance and Watford’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Heritage Insurance $480.17 million 0.84 $27.16 million $1.38 9.80
Watford $575.23 million 1.12 -$34.88 million N/A N/A

Heritage Insurance has higher earnings, but lower revenue than Watford.

Summary

Heritage Insurance beats Watford on 8 of the 12 factors compared between the two stocks.

Heritage Insurance Company Profile

Heritage Insurance Holdings, Inc., through its subsidiaries, provides personal and commercial residential insurance products. The company offers personal residential property insurance for single-family homeowners and condominium owners; rental property insurance; and commercial residential insurance in Alabama, Connecticut, Florida, Georgia, Hawaii, Massachusetts, New York, New Jersey, North Carolina, Rhode Island, and South Carolina, as well as residential wind-only property insurance. As of December 31, 2018, it had approximately 512,793 personal residential policies and 3,000 commercial residential policies. The company markets and writes its voluntary personal line policies through a network of retail independent agents, wholesale agents, and a partnership with a direct agency, as well as indirectly to approximately 1,500 retail locations through 8 wholesale agency relationships. It also provides restoration, and emergency and recovery services; and property management, retail agency, and reinsurance services. The company was founded in 2012 and is headquartered in Clearwater, Florida.

Watford Company Profile

Watford Holdings Ltd., together with its subsidiaries, operates as a property, casualty, and mortgage insurance and reinsurance company worldwide. The company was founded in 2013 and is headquartered in Pembroke, Bermuda.

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