Financial Comparison: Root (NASDAQ:ROOT) and Stewart Information Services (NYSE:STC)

Root (NASDAQ:ROOT) and Stewart Information Services (NYSE:STC) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, risk, analyst recommendations, profitability, earnings, institutional ownership and valuation.

Volatility & Risk

Root has a beta of 2.88, meaning that its stock price is 188% more volatile than the S&P 500. Comparatively, Stewart Information Services has a beta of 0.99, meaning that its stock price is 1% less volatile than the S&P 500.

Insider and Institutional Ownership

59.8% of Root shares are owned by institutional investors. Comparatively, 96.9% of Stewart Information Services shares are owned by institutional investors. 12.0% of Root shares are owned by company insiders. Comparatively, 2.9% of Stewart Information Services 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.

Profitability

This table compares Root and Stewart Information Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Root	3.58%	19.97%	3.39%
Stewart Information Services	4.19%	10.07%	5.17%

Analyst Recommendations

This is a summary of recent ratings and target prices for Root and Stewart Information Services, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Root	0	5	2	0	2.29
Stewart Information Services	0	1	4	0	2.80

Root currently has a consensus price target of $93.20, indicating a potential upside of 75.52%. Stewart Information Services has a consensus price target of $83.00, indicating a potential upside of 22.36%. Given Root’s higher possible upside, research analysts clearly believe Root is more favorable than Stewart Information Services.

Earnings & Valuation

This table compares Root and Stewart Information Services”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Root	$1.56 billion	0.54	$40.30 million	$3.34	15.90
Stewart Information Services	$2.92 billion	0.71	$115.54 million	$4.48	15.14

Stewart Information Services has higher revenue and earnings than Root. Stewart Information Services is trading at a lower price-to-earnings ratio than Root, indicating that it is currently the more affordable of the two stocks.

Summary

Stewart Information Services beats Root on 9 of the 14 factors compared between the two stocks.

About Root

Root, Inc. provides insurance products and services in the United States. The company offers automobile, homeowners, and renters insurance products. It operates a direct-to-consumer model; and serves customers primarily through mobile applications, as well as through its website. The company's direct distribution channels also cover digital, media, and referral channels, as well as distribution partners and agencies. Root, Inc. was incorporated in 2015 and is headquartered in Columbus, Ohio.

About Stewart Information Services

Stewart Information Services Corporation, through its subsidiaries, provides title insurance and real estate transaction related services in the United States and internationally. The company involves in searching, examining, closing, and insuring the condition of the title to real property. It also offers home and personal insurance services; services for tax-deferred exchanges; and digital customer engagement platform services. It also provides appraisal management, online notarization and closing, credit and real estate information, and search and valuation services. The company serves homebuyers and sellers, residential and commercial real estate professionals, mortgage lenders and servicers, title agencies and real estate attorneys, and home builders through direct operations, network of independent agencies, and other businesses. The company was founded in 1893 and is headquartered in Houston, Texas.