Head-To-Head Analysis: Hagerty (NYSE:HGTY) & Fairfax Financial (OTCMKTS:FRFHF)

Fairfax Financial (OTCMKTS:FRFHF) and Hagerty (NYSE:HGTY) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, valuation, earnings, profitability and risk.

Volatility and Risk

Fairfax Financial has a beta of 0.6, indicating that its share price is 40% less volatile than the S&P 500. Comparatively, Hagerty has a beta of 0.89, indicating that its share price is 11% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Fairfax Financial	15.01%	16.47%	4.62%
Hagerty	5.85%	16.85%	4.94%

Insider and Institutional Ownership

10.4% of Fairfax Financial shares are owned by institutional investors. Comparatively, 20.5% of Hagerty shares are owned by institutional investors. 16.7% of Hagerty shares are owned 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.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Fairfax Financial and Hagerty, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fairfax Financial	0	3	3	0	2.50
Hagerty	0	4	5	0	2.56

Hagerty has a consensus price target of $14.13, indicating a potential upside of 11.93%. Given Hagerty’s stronger consensus rating and higher possible upside, analysts plainly believe Hagerty is more favorable than Fairfax Financial.

Valuation and Earnings

This table compares Fairfax Financial and Hagerty”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Fairfax Financial	$31.06 billion	1.20	$3.87 billion	$206.77	8.26
Hagerty	$1.20 billion	3.60	$17.02 million	$0.28	45.07

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

Summary

Hagerty beats Fairfax Financial on 10 of the 14 factors compared between the two stocks.

About Fairfax Financial

Fairfax Financial Holdings Limited, through its subsidiaries, provides property and casualty insurance and reinsurance, and investment management services in the United States, Canada, Asia, and internationally. The company operates through Property and Casualty Insurance and Reinsurance, Life insurance and Run-off, and Non-Insurance Companies segments. It insures against losses to property from fire, explosion, earthquake, windstorm, flood, terrorism, boiler explosion, machinery breakdown, and construction defects, as well as underwrites automobile, commercial and personal property, and crop insurance. The company also offers workers' compensation, automobile, employer's liability, accident and health, medical malpractice, professional liability, and umbrella coverage insurance products; marine, aerospace, surety risk, and other risks and liabilities insurance products; and reinsurance products. In addition, it franchises, owns, and operates restaurants; retails sports lifestyle products; provides integrated travel and travel-related financial services, as well as advanced digital tools for agriculture; owns and operates holiday resorts; originates, processes, and distributes value-added pulses and staple foods; develops, manages, and invests in hospitality real estate. The company was formerly known as Markel Financial Holdings Limited and changed its name to Fairfax Financial Holdings Limited in 1987. Fairfax Financial Holdings Limited was incorporated in 1951 and is headquartered in Toronto, Canada.

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.