Financial Contrast: Heritage Insurance (NYSE:HRTG) and Hippo (NYSE:HIPO)

Heritage Insurance (NYSE:HRTG) and Hippo (NYSE:HIPO) are both small-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their analyst recommendations, profitability, risk, valuation, institutional ownership, dividends and earnings.

Volatility & Risk

Heritage Insurance has a beta of 0.9, meaning that its share price is 10% less volatile than the S&P 500. Comparatively, Hippo has a beta of 1.33, meaning that its share price is 33% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Heritage Insurance and Hippo, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Heritage Insurance	0	2	1	0	2.33
Hippo	0	2	2	0	2.50

Heritage Insurance presently has a consensus target price of $9.00, indicating a potential upside of 38.67%. Hippo has a consensus target price of $19.33, indicating a potential upside of 23.06%. Given Heritage Insurance’s higher probable upside, analysts plainly believe Heritage Insurance is more favorable than Hippo.

Valuation and Earnings

This table compares Heritage Insurance and Hippo’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Heritage Insurance	$735.50 million	0.27	$45.31 million	$1.64	3.96
Hippo	$209.70 million	1.83	-$273.10 million	($10.08)	-1.56

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

Profitability

This table compares Heritage Insurance and Hippo’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Heritage Insurance	6.07%	24.02%	2.05%
Hippo	-93.69%	-59.81%	-15.05%

Institutional & Insider Ownership

59.0% of Heritage Insurance shares are owned by institutional investors. Comparatively, 43.0% of Hippo shares are owned by institutional investors. 14.0% of Heritage Insurance shares are owned by insiders. Comparatively, 11.4% of Hippo shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

Heritage Insurance beats Hippo on 10 of the 14 factors compared between the two stocks.

About Heritage Insurance

Heritage Insurance Holdings, Inc., through its subsidiaries, provides personal and commercial residential insurance products. The company offers personal residential insurance in Alabama, California, Connecticut, Delaware, Florida, Georgia, Hawaii, Maryland, Massachusetts, Mississippi, New Jersey, New York, North Carolina, Rhode Island, South Carolina, and Virginia; commercial residential insurance for properties in Florida, New Jersey, and New York; and licensed in the state of Pennsylvania, as well as personal residential and wind-only property insurance. It also provides restoration, emergency, and recovery services; property management, and reinsurance services; homeowners insurance products, including single-family, homeowners or duplex, and condominium owners; and dwelling fire insurance policies. In addition, the company provides personal line policies through a network of retail independent agents, wholesale agents, and a partnership with a direct agency, as well as distribute indirectly to retail locations through wholesale agency relationships. Further, it offers personal and commercial insurance policies through a network of independent agencies. The company was founded in 2012 and is headquartered in Tampa, Florida.

About Hippo

Hippo Holdings Inc. provides property and casualty insurance products to individuals and business customers primarily in the United States. The company operates through three segments: Services, Insurance-as-a-Service, and Hippo Home Insurance Program. Its insurance products include homeowners' insurance against risks of fire, wind, and theft, as well as other personal lines policies from third party carriers; and personal and commercial, as well as home, auto, cyber, small business, life, specialty lines, and other insurance products. The company distributes insurance products and services through its technology platform and website, as well as operates licensed insurance agencies. Hippo Holdings Inc. is headquartered in Palo Alto, California.