Critical Survey: SelectQuote (NYSE:SLQT) and CNA Financial (NYSE:CNA)

CNA Financial (NYSE:CNA) and SelectQuote (NYSE:SLQT) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, valuation, analyst recommendations, risk, dividends, profitability and institutional ownership.

Insider and Institutional Ownership

98.4% of CNA Financial shares are held by institutional investors. Comparatively, 34.6% of SelectQuote shares are held by institutional investors. 0.3% of CNA Financial shares are held by company insiders. Comparatively, 13.1% of SelectQuote shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Risk and Volatility

CNA Financial has a beta of 0.27, indicating that its stock price is 73% less volatile than the S&P 500. Comparatively, SelectQuote has a beta of 1.7, indicating that its stock price is 70% more volatile than the S&P 500.

Profitability

This table compares CNA Financial and SelectQuote’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CNA Financial	8.16%	11.34%	1.84%
SelectQuote	3.84%	19.70%	5.33%

Analyst Recommendations

This is a summary of current recommendations for CNA Financial and SelectQuote, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CNA Financial	0	1	1	0	2.50
SelectQuote	2	1	0	1	2.00

SelectQuote has a consensus price target of $3.00, indicating a potential upside of 456.59%. Given SelectQuote’s higher possible upside, analysts plainly believe SelectQuote is more favorable than CNA Financial.

Earnings & Valuation

This table compares CNA Financial and SelectQuote”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CNA Financial	$14.86 billion	0.90	$1.28 billion	$4.55	10.81
SelectQuote	$1.62 billion	0.06	$62.19 million	($0.08)	-6.74

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

Summary

CNA Financial beats SelectQuote on 9 of the 15 factors compared between the two stocks.

About CNA Financial

CNA Financial Corporation provides commercial property and casualty insurance products in the United States and internationally. 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 and cyber 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 casualty coverages for healthcare industry; surety and fidelity bonds; and warranty and alternative risks products. It also provides property, marine, boiler, and machinery coverage insurance products; casualty insurance products comprising workers' compensation, general and product liability, commercial auto, umbrella, and excess and surplus coverages; specialized loss-sensitive insurance programs and total risk management services; and run-off long term care policies. The company was founded in 1853 and is based in Chicago, Illinois. CNA Financial Corporation operates as a subsidiary of Loews Corporation.

About SelectQuote

SelectQuote, Inc. operates a technology-enabled, direct-to-consumer distribution platform that sells a range of insurance products and healthcare services in the United States. The company operates through three segments: Senior; Life; and Auto & Home. It distributes senior health policies, such as medicare advantage, medicare supplement, medicare part D, and other ancillary senior health insurance related products, including prescription drugs, dental, vision, and hearing plans; life insurance products, such as term life, final expense, and other ancillary products, including critical illness, accidental death, and juvenile insurance; homeowners, auto, dwelling fire, and other ancillary insurance products; and non-commercial auto and home property, and casualty policies. The company also provides SelectRx, an accredited patient-centered pharmacy home pharmacy, which offers essential prescription medications, OTC medications, customized medication packaging, medication therapy management, and long-term pharmacy care; and population health that helps members understand the benefits available under their health plans, and contracts with insurance carriers. SelectQuote, Inc. was incorporated in 1999 and is headquartered in Overland Park, Kansas.