Heritage Insurance (NYSE: HRTG) and Maiden (NASDAQ:MHLD) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their analyst recommendations, dividends, valuation, earnings, profitability, risk and institutional ownership.
Volatility & Risk
Heritage Insurance has a beta of 1.32, indicating that its stock price is 32% more volatile than the S&P 500. Comparatively, Maiden has a beta of 1.1, indicating that its stock price is 10% more volatile than the S&P 500.
This table compares Heritage Insurance and Maiden’s net margins, return on equity and return on assets.
||Return on Equity
||Return on Assets
Institutional & Insider Ownership
82.9% of Heritage Insurance shares are owned by institutional investors. Comparatively, 66.2% of Maiden shares are owned by institutional investors. 16.1% of Heritage Insurance shares are owned by company insiders. Comparatively, 10.0% of Maiden shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
This is a summary of recent recommendations for Heritage Insurance and Maiden, as provided by MarketBeat.com.
||Strong Buy Ratings
Heritage Insurance presently has a consensus target price of $21.00, suggesting a potential upside of 31.83%. Maiden has a consensus target price of $10.40, suggesting a potential upside of 48.57%. Given Maiden’s higher probable upside, analysts plainly believe Maiden is more favorable than Heritage Insurance.
Earnings & Valuation
This table compares Heritage Insurance and Maiden’s top-line revenue, earnings per share and valuation.
||Earnings Per Share
Heritage Insurance has higher earnings, but lower revenue than Maiden. Maiden is trading at a lower price-to-earnings ratio than Heritage Insurance, indicating that it is currently the more affordable of the two stocks.
Heritage Insurance pays an annual dividend of $0.24 per share and has a dividend yield of 1.5%. Maiden pays an annual dividend of $0.60 per share and has a dividend yield of 8.6%. Heritage Insurance pays out 15.7% of its earnings in the form of a dividend. Maiden pays out -27.8% 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. Maiden is clearly the better dividend stock, given its higher yield and lower payout ratio.
Heritage Insurance beats Maiden on 12 of the 16 factors compared between the two stocks.
About Heritage Insurance
Heritage Insurance Holdings, Inc. (Heritage Insurance) is a property and casualty insurance holding company. The Company provides personal and commercial residential insurance. Through its subsidiary, Heritage Property & Casualty Insurance Company (Heritage P&C), it provides personal residential insurance for single-family homeowners and condominium owners, rental property insurance and commercial residential insurance in the state of Florida and North Carolina. The Company is vertically integrated and controls or manages all aspects of insurance underwriting, customer service, actuarial analysis, distribution and claims processing and adjusting. The Company’s primary products are personal and commercial residential insurance, which it offers only in Florida. As of December 31, 2016, it marketed and wrote personal lines voluntary policies through a network of approximately 1,900 independent agents. It had 150,998 voluntary personal residential policies as of December 31, 2016.
Maiden Holdings, Ltd., through its subsidiaries, provides reinsurance solutions to regional and specialty insurers in the United States, Europe, and internationally. It operates in two segments, Diversified Reinsurance and AmTrust Reinsurance. The Diversified Reinsurance segment offers property and casualty reinsurance, including the writing of treaties on a quota share or excess of loss basis; and facultative risks, which are marketed through third-party intermediaries and on a direct basis. The AmTrust Reinsurance segment provides small commercial business insurance, including workers' compensation, commercial package, and other property and casualty insurance products; and specialty risk and extended warranty coverage for consumer and commercial goods, as well as custom designed coverages, such as accidental damage plans and payment protection plans related to the sale of consumer and commercial goods. This segment also offers specialty program comprising package products, general liability, commercial auto liability, excess and surplus lines programs, and other specialty commercial property and casualty insurance to small and middle market companies. In addition, the company offers auto and credit life insurance products through its insurer partners to retail clients. Maiden Holdings, Ltd. was founded in 2007 and is headquartered in Pembroke, Bermuda.
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