Root (NASDAQ:ROOT – Get Rating) and CNA Financial (NYSE:CNA – Get Rating) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, profitability, risk, dividends and earnings.
Earnings and Valuation
This table compares Root and CNA Financial’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Root||$345.40 million||0.35||-$521.10 million||($29.32)||-0.29|
|CNA Financial||$11.91 billion||0.84||$1.20 billion||$3.82||9.68|
CNA Financial has higher revenue and earnings than Root. Root is trading at a lower price-to-earnings ratio than CNA Financial, indicating that it is currently the more affordable of the two stocks.
|Net Margins||Return on Equity||Return on Assets|
This is a summary of current ratings and recommmendations for Root and CNA Financial, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Root presently has a consensus target price of $23.29, indicating a potential upside of 173.68%. Given Root’s higher possible upside, research analysts plainly believe Root is more favorable than CNA Financial.
Insider & Institutional Ownership
98.5% of CNA Financial shares are held by institutional investors. 27.6% of Root shares are held by insiders. Comparatively, 0.2% of CNA Financial shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Volatility and Risk
Root has a beta of 0.03, indicating that its share price is 97% less volatile than the S&P 500. Comparatively, CNA Financial has a beta of 0.68, indicating that its share price is 32% less volatile than the S&P 500.
CNA Financial beats Root on 11 of the 13 factors compared between the two stocks.
Root, Inc. provides insurance products and services in the United States. The company offers automobile, homeowners, and renters insurance products. The company operates a direct-to-consumer model and serves customers primarily through mobile applications, as well as through its website. Its direct distribution channels also cover digital, media, and referral channels, as well as distribution partners and agencies. The company was incorporated in 2015 and is headquartered in Columbus, Ohio.
About CNA Financial
CNA Financial Corporation provides commercial property and casualty insurance products primarily in the United States. It operates through Specialty, Commercial, International, Life & Group, and Corporate & Other segments. The company offers professional liability coverages and risk management services to various professional firms, including architects, real estate agents, and accounting and law firms; directors and officers, employment practices, fiduciary, and fidelity coverages to small and mid-size firms, public and privately held firms, and not-for-profit organizations; professional and general liability, as well as associated standard property and casualty coverages for healthcare industry; surety and fidelity bonds; and warranty and alternative risks products. It also provides property insurance products, such as property, marine, boiler, and machinery coverages; casualty insurance products comprising workers' compensation, general and product liability, commercial auto, and umbrella coverages; specialized loss-sensitive insurance programs and total risk management services; and run-off long term care policies. In addition, the company offers long-tail exposures comprising commercial automobile liability, workers' compensation, general and medical professional liability, other professional and management liability, and assumed reinsurance run-off and products liability; and short-tail exposures, such as property, commercial automobile physical damage, marine, and surety. It markets its products through independent agents, brokers, and general underwriters to small, medium, and large businesses; insurance companies; associations; professionals; and other groups in the marine, oil and gas, construction, manufacturing, life science, property, financial services, healthcare, and technology industries. The company was founded in 1853 and is headquartered in Chicago, Illinois. CNA Financial Corporation operates as a subsidiary of Loews Corporation.
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