Reviewing Safety Insurance Group (NASDAQ:SAFT) and SelectQuote (NYSE:SLQT)

SelectQuote (NYSE:SLQT) and Safety Insurance Group (NASDAQ:SAFT) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, dividends, earnings, valuation, institutional ownership, profitability and analyst recommendations.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for SelectQuote and Safety Insurance Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SelectQuote	2	1	0	1	2.00
Safety Insurance Group	0	1	1	0	2.50

SelectQuote presently has a consensus price target of $3.00, indicating a potential upside of 457.62%. Given SelectQuote’s higher probable upside, equities analysts plainly believe SelectQuote is more favorable than Safety Insurance Group.

Profitability

This table compares SelectQuote and Safety Insurance Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SelectQuote	3.84%	19.70%	5.33%
Safety Insurance Group	5.33%	7.23%	2.58%

Earnings and Valuation

This table compares SelectQuote and Safety Insurance Group”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SelectQuote	$1.62 billion	0.06	$62.19 million	($0.08)	-6.73
Safety Insurance Group	$1.26 billion	1.20	$99.25 million	$4.64	22.24

Safety Insurance Group has lower revenue, but higher earnings than SelectQuote. SelectQuote is trading at a lower price-to-earnings ratio than Safety Insurance Group, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

34.6% of SelectQuote shares are owned by institutional investors. Comparatively, 81.0% of Safety Insurance Group shares are owned by institutional investors. 13.1% of SelectQuote shares are owned by company insiders. Comparatively, 2.2% of Safety Insurance Group shares are owned by company 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.

Risk & Volatility

SelectQuote has a beta of 1.7, suggesting that its stock price is 70% more volatile than the S&P 500. Comparatively, Safety Insurance Group has a beta of 0.16, suggesting that its stock price is 84% less volatile than the S&P 500.

Summary

Safety Insurance Group beats SelectQuote on 8 of the 15 factors compared between the two stocks.

About SelectQuote

SelectQuote, Inc. operates a technology-enabled, direct-to-consumer distribution platform that sells a range of insurance products and healthcare services in the United States. The company operates through three segments: Senior; Life; and Auto & Home. It distributes senior health policies, such as medicare advantage, medicare supplement, medicare part D, and other ancillary senior health insurance related products, including prescription drugs, dental, vision, and hearing plans; life insurance products, such as term life, final expense, and other ancillary products, including critical illness, accidental death, and juvenile insurance; homeowners, auto, dwelling fire, and other ancillary insurance products; and non-commercial auto and home property, and casualty policies. The company also provides SelectRx, an accredited patient-centered pharmacy home pharmacy, which offers essential prescription medications, OTC medications, customized medication packaging, medication therapy management, and long-term pharmacy care; and population health that helps members understand the benefits available under their health plans, and contracts with insurance carriers. SelectQuote, Inc. was incorporated in 1999 and is headquartered in Overland Park, Kansas.

About Safety Insurance Group

Safety Insurance Group, Inc. provides private passenger and commercial automobile, and homeowner insurance in the United States. The company’s private passenger automobile policies offer coverage for bodily injury and property damage to others, no-fault personal injury coverage for the insured/insured’s car occupants, and physical damage coverage for an insured’s own vehicle for collision or other perils. It also provides commercial automobile policies that offer insurance for commercial vehicles used for business purposes, including private passenger-type vehicles, trucks, tractors and trailers, insure individual vehicles, and commercial fleets; and homeowners policies, which provide coverage for homes, condominiums, and apartments for losses to a dwelling and its contents from various perils, and coverage for liability to others arising from ownership or occupancy. In addition, the company offers business owners policies that cover apartments and residential condominiums, restaurants, office condominiums, processing and services businesses, special trade contractors, and wholesalers. Further, it provides personal umbrella policies, which provide personal excess liability coverage over and above the limits of individual automobile, watercraft, and homeowner’s insurance policies; and commercial umbrella, which offers an excess liability product to clients, as well as underwrites dwelling fire insurance for non-owner-occupied residences. Additionally, the company offers inland marine coverage for homeowners and business owner policies, and watercraft coverage for small and medium sized pleasure crafts. It distributes its products through independent agents. The company was formerly known as Safety Holdings Inc and changed its name to Safety Insurance Group, Inc. in April 2002. Safety Insurance Group, Inc. was founded in 1979 and is headquartered in Boston, Massachusetts.