Contrasting Waterdrop (NYSE:WDH) and The Hartford Insurance Group (NYSE:HIG)

Waterdrop (NYSE:WDH) and The Hartford Insurance Group (NYSE:HIG) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, dividends, risk, institutional ownership, earnings, analyst recommendations and profitability.

Insider and Institutional Ownership

2.0% of Waterdrop shares are held by institutional investors. Comparatively, 93.4% of The Hartford Insurance Group shares are held by institutional investors. 24.6% of Waterdrop shares are held by insiders. Comparatively, 1.3% of The Hartford Insurance Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings for Waterdrop and The Hartford Insurance Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Waterdrop	0	1	0	0	2.00
The Hartford Insurance Group	0	13	4	1	2.33

The Hartford Insurance Group has a consensus price target of $143.50, indicating a potential upside of 4.65%. Given The Hartford Insurance Group’s stronger consensus rating and higher probable upside, analysts plainly believe The Hartford Insurance Group is more favorable than Waterdrop.

Profitability

This table compares Waterdrop and The Hartford Insurance Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Waterdrop	10.69%	10.47%	7.40%
The Hartford Insurance Group	15.85%	20.93%	4.52%

Earnings and Valuation

This table compares Waterdrop and The Hartford Insurance Group”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Waterdrop	$5.08 billion	0.07	$81.36 million	$0.21	4.79
The Hartford Insurance Group	$29.08 billion	1.26	$3.84 billion	$16.52	8.30

The Hartford Insurance Group has higher revenue and earnings than Waterdrop. Waterdrop is trading at a lower price-to-earnings ratio than The Hartford Insurance Group, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Waterdrop has a beta of -0.17, suggesting that its stock price is 117% less volatile than the S&P 500. Comparatively, The Hartford Insurance Group has a beta of 0.48, suggesting that its stock price is 52% less volatile than the S&P 500.

Dividends

Waterdrop pays an annual dividend of $0.04 per share and has a dividend yield of 4.0%. The Hartford Insurance Group pays an annual dividend of $2.68 per share and has a dividend yield of 2.0%. Waterdrop pays out 19.0% of its earnings in the form of a dividend. The Hartford Insurance Group pays out 16.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. The Hartford Insurance Group has increased its dividend for 12 consecutive years.

Summary

The Hartford Insurance Group beats Waterdrop on 15 of the 18 factors compared between the two stocks.

About Waterdrop

Waterdrop Inc. is a China-focused technology platform that connects consumers with insurance products and medical fundraising services. Its insurance business distributes policies from third-party insurers through online channels, including coverage for health, life and accidents. The company also operates Waterdrop Medical Crowdfunding, a platform through which people can seek donations to help cover medical expenses. Waterdrop was founded in 2016 by Shen Peng, who has served as the company’s chairman and chief executive officer.

About The Hartford Insurance Group

The Hartford Financial Services Group, Inc., known as The Hartford, is a U.S.-based insurance company founded in 1810 and headquartered in Hartford, Connecticut. It provides property and casualty insurance and employee benefits to businesses, organizations and individuals. Its commercial insurance offerings include coverage such as workers’ compensation, general liability, commercial auto and property insurance. The company also provides group benefits, including life, disability and leave-management products, along with personal auto and homeowners insurance, which it offers through arrangements including its relationship with AARP.