Financial Survey: Hagerty (NYSE:HGTY) & Accelerant (NYSE:ARX)

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

Valuation and Earnings

This table compares Accelerant and Hagerty”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Accelerant	$912.90 million	4.70	-$1.35 billion	($6.65)	-2.97
Hagerty	$1.46 billion	3.18	$49.02 million	$0.09	149.54

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

Volatility & Risk

Accelerant has a beta of 0.08, indicating that its stock price is 92% less volatile than the S&P 500. Comparatively, Hagerty has a beta of 0.81, indicating that its stock price is 19% less volatile than the S&P 500.

Insider and Institutional Ownership

20.5% of Hagerty shares are held by institutional investors. 66.6% of Accelerant shares are held by insiders. Comparatively, 3.7% of Hagerty shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Accelerant and Hagerty’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Accelerant	-113.08%	42.79%	3.68%
Hagerty	1.81%	5.15%	1.58%

Analyst Ratings

This is a summary of current recommendations and price targets for Accelerant and Hagerty, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Accelerant	2	7	3	0	2.08
Hagerty	0	4	1	1	2.50

Accelerant currently has a consensus target price of $17.98, indicating a potential downside of 8.92%. Hagerty has a consensus target price of $13.80, indicating a potential upside of 2.53%. Given Hagerty’s stronger consensus rating and higher possible upside, analysts clearly believe Hagerty is more favorable than Accelerant.

Summary

Hagerty beats Accelerant on 10 of the 15 factors compared between the two stocks.

About Accelerant

Accelerant Holdings, together with its subsidiaries, operates a data-driven risk exchange that connects selected specialty insurance underwriters with risk capital partners. It operates through Exchange Services, MGA Operations, and Underwriting segments. The Exchange Services segment consists of risk exchange, its operating platform that incorporates various technology, data ingestion, and agency operations that serve the needs of its members and risk capital partners. Its Risk capital partners write premiums directly through the Risk Exchange pay us a fixed-percentage, volume-based fee for sourcing, managing, and monitoring the business they write. The MGA Operations segment includes the fees earned by members, predominantly for originating and underwriting a portfolio of insurance policies, reduced by the expenses associated with providing services. The Underwriting segment is involved in underwriting insurance policies and assumption of reinsurance policies issued or accepted by consolidated insurance and reinsurance companies. The activities of insurance companies include property and casualty insurance, policy issuance, and reinsurance arrangements. It serves small-to-medium sized commercial clients primarily in the United States, Europe, Canada, Australia, and the United Kingdom. Accelerant Holdings was founded in 2018 and is based in Grand Cayman, Cayman Islands.

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.