Head to Head Analysis: American Coastal Insurance (NASDAQ:ACIC) versus First American Financial (NYSE:FAF)

American Coastal Insurance (NASDAQ:ACIC) and First American Financial (NYSE:FAF) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, dividends, earnings, risk and profitability.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for American Coastal Insurance and First American Financial, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
American Coastal Insurance	0	0	0	0	0.00
First American Financial	0	1	3	0	2.75

First American Financial has a consensus target price of $75.00, suggesting a potential upside of 16.68%. Given First American Financial’s stronger consensus rating and higher probable upside, analysts plainly believe First American Financial is more favorable than American Coastal Insurance.

Risk & Volatility

American Coastal Insurance has a beta of -0.26, meaning that its share price is 126% less volatile than the S&P 500. Comparatively, First American Financial has a beta of 1.27, meaning that its share price is 27% more volatile than the S&P 500.

Profitability

This table compares American Coastal Insurance and First American Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
American Coastal Insurance	25.26%	30.65%	6.60%
First American Financial	2.90%	10.41%	3.33%

Earnings & Valuation

This table compares American Coastal Insurance and First American Financial”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
American Coastal Insurance	$296.66 million	1.86	$75.72 million	$1.63	6.94
First American Financial	$6.13 billion	1.07	$131.10 million	$1.81	35.51

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

Institutional & Insider Ownership

22.1% of American Coastal Insurance shares are held by institutional investors. Comparatively, 89.1% of First American Financial shares are held by institutional investors. 49.9% of American Coastal Insurance shares are held by insiders. Comparatively, 3.7% of First American Financial shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

First American Financial beats American Coastal Insurance on 9 of the 14 factors compared between the two stocks.

About American Coastal Insurance

American Coastal Insurance Corporation operates as a property and casualty insurance holding company that sources, writes, and services residential personal and commercial property, and casualty insurance policies in the United States. The company offers structure, content, and liability coverage for standard single-family homeowners, renters, and condominium unit owners. It also provides commercial multi-peril property insurance for residential condominium associations and apartments, as well as loss or damage to buildings, inventory, and equipment caused by fire, wind, hail, water, theft, and vandalism. In addition, the company offers equipment breakdown, identity theft, cyber security, and flood policies. The company markets and distributes its products through a network of independent agencies. The company was formerly known as United Insurance Holdings Corp. and changed its name to American Coastal Insurance Corporation in August 2023. American Coastal Insurance Corporation was founded in 1999 and is headquartered in Saint Petersburg, Florida.

About First American Financial

First American Financial Corporation, through its subsidiaries, provides financial services. It operates through Title Insurance and Services, and Home Warranty segments. The Title Insurance and Services segment issues title insurance policies on residential and commercial property, as well as offers related products and services internationally. This segment also provides closing and/or escrow services; products, services, and solutions to mitigate risk or otherwise facilitate real estate transactions; and appraisals and other valuation-related products and services, lien release and document custodial services, warehouse lending services, default-related products and services, document generation services, mortgage loans subservicing, and related products and services, as well as banking, trust, and wealth management services. In addition, it accommodates tax-deferred exchanges of real estate; and maintains, manages, and provides access to title plant data and records. This segment offers its products through a network of direct operations and agents in various states and in the District of Columbia, as well as in Canada, the United Kingdom, Australia, New Zealand, South Korea, and internationally. The Home Warranty segment provides home warranty products, including residential service contracts that cover residential systems, such as heating and air conditioning systems, and various appliances against failures that occur as the result of normal usage during the coverage period. This segment operates in various states and the District of Columbia. The company was founded in 1889 and is headquartered in Santa Ana, California.