Head-To-Head Analysis: TWFG (NASDAQ:TWFG) and Waterdrop (NYSE:WDH)

Waterdrop (NYSE:WDH) and TWFG (NASDAQ:TWFG) are both small-cap business services companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, risk, earnings, institutional ownership, valuation, dividends and profitability.

Profitability

This table compares Waterdrop and TWFG’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Waterdrop	9.71%	5.67%	4.28%
TWFG	N/A	N/A	N/A

Earnings & Valuation

This table compares Waterdrop and TWFG”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Waterdrop	$370.53 million	1.13	$23.06 million	$0.09	12.56
TWFG	$185.45 million	2.83	$26.10 million	N/A	N/A

TWFG has lower revenue, but higher earnings than Waterdrop.

Institutional and Insider Ownership

2.0% of Waterdrop shares are owned by institutional investors. 24.6% of Waterdrop shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings for Waterdrop and TWFG, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Waterdrop	0	0	0	0	0.00
TWFG	0	3	6	0	2.67

TWFG has a consensus price target of $30.43, indicating a potential downside of 14.04%. Given TWFG’s stronger consensus rating and higher probable upside, analysts clearly believe TWFG is more favorable than Waterdrop.

Summary

Waterdrop beats TWFG on 6 of the 11 factors compared between the two stocks.

About Waterdrop

Waterdrop Inc., through its subsidiaries, provides online insurance brokerage services to match and connect users with related insurance products underwritten by insurance companies in the People's Republic of China. The company offers short-term health and long-term health and life insurance products and services. It also operates a medical crowdfunding platform. Waterdrop Inc. was founded in 2016 and is headquartered in Beijing, the People's Republic of China.

About TWFG

TWFG, Inc. operates an independent distribution platform for personal and commercial insurance products in the United States. Its personal and commercial insurance products include auto, home, renters, life, health, motorcycle, umbrella, boat, recreational vehicle, flood, wind, event, luxury item, general liability, property, business auto, workers’ compensation, business owner policy, and professional liability insurance products, as well as commercial bonds and group benefits. The company was founded in 2001 and is based in The Woodlands, Texas. TWFG, Inc. operates as a subsidiary of Bunch Family Holdings, LLC.