Critical Analysis: Stewart Information Services (NYSE:STC) and Hagerty (NYSE:HGTY)

Stewart Information Services (NYSE:STC) and Hagerty (NYSE:HGTY) are both mid-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, earnings, risk, analyst recommendations, valuation, institutional ownership and profitability.

Valuation & Earnings

This table compares Stewart Information Services and Hagerty”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Stewart Information Services	$2.92 billion	0.70	$115.54 million	$4.48	14.93
Hagerty	$1.46 billion	2.36	$49.02 million	$0.20	50.09

Stewart Information Services has higher revenue and earnings than Hagerty. Stewart Information Services is trading at a lower price-to-earnings ratio than Hagerty, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Stewart Information Services has a beta of 1.02, meaning that its stock price is 2% more volatile than the S&P 500. Comparatively, Hagerty has a beta of 0.83, meaning that its stock price is 17% less volatile than the S&P 500.

Institutional and Insider Ownership

96.9% of Stewart Information Services shares are owned by institutional investors. Comparatively, 20.5% of Hagerty shares are owned by institutional investors. 2.9% of Stewart Information Services shares are owned by company insiders. Comparatively, 16.7% of Hagerty shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares Stewart Information Services and Hagerty’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Stewart Information Services	4.19%	10.07%	5.17%
Hagerty	5.11%	11.94%	3.61%

Analyst Recommendations

This is a summary of recent ratings and target prices for Stewart Information Services and Hagerty, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Stewart Information Services	0	0	4	0	3.00
Hagerty	0	5	4	0	2.44

Stewart Information Services currently has a consensus target price of $81.00, indicating a potential upside of 21.13%. Hagerty has a consensus target price of $13.38, indicating a potential upside of 33.51%. Given Hagerty’s higher probable upside, analysts clearly believe Hagerty is more favorable than Stewart Information Services.

Summary

Stewart Information Services beats Hagerty on 7 of the 13 factors compared between the two stocks.

About Stewart Information Services

Stewart Information Services Corporation, through its subsidiaries, provides title insurance and real estate transaction related services in the United States and internationally. The company involves in searching, examining, closing, and insuring the condition of the title to real property. It also offers home and personal insurance services; services for tax-deferred exchanges; and digital customer engagement platform services. It also provides appraisal management, online notarization and closing, credit and real estate information, and search and valuation services. The company serves homebuyers and sellers, residential and commercial real estate professionals, mortgage lenders and servicers, title agencies and real estate attorneys, and home builders through direct operations, network of independent agencies, and other businesses. The company was founded in 1893 and is headquartered in Houston, Texas.

About Hagerty

Hagerty, Inc. provides insurance agency services worldwide. It offers motor vehicle and boat insurance products; and reinsurance products. The company provides Hagerty Media, which publishes contents through the Hagerty Drivers Club Magazine (HDC), video content, and social media channels; HDC that offers subscription based products and services, including HDC Magazine, automotive enthusiast events, proprietary vehicle valuation tools, emergency roadside services, and special vehicle-related discounts. In addition, it offers HVT, a valuation tool used by the customer to access current and historic pricing data of collector vehicle models. Further, the company offers Hagerty Garage + Social, a platform that provides clubhouses and car storage facilities. Hagerty, Inc. is headquartered in Traverse City, Michigan.