Contrasting Hagerty (NYSE:HGTY) and NMI (NASDAQ:NMIH)

NMI (NASDAQ:NMIH) and Hagerty (NYSE:HGTY) are both mid-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, valuation, risk, dividends, analyst recommendations, institutional ownership and earnings.

Analyst Recommendations

This is a breakdown of current ratings and target prices for NMI and Hagerty, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NMI	0	1	4	0	2.80
Hagerty	0	4	4	0	2.50

NMI presently has a consensus target price of $42.80, suggesting a potential upside of 10.00%. Hagerty has a consensus target price of $14.00, suggesting a potential upside of 23.00%. Given Hagerty’s higher probable upside, analysts plainly believe Hagerty is more favorable than NMI.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NMI	$706.44 million	4.19	$388.93 million	$4.91	7.92
Hagerty	$1.46 billion	2.68	$49.02 million	$0.33	34.49

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
NMI	55.05%	15.78%	10.64%
Hagerty	5.98%	16.24%	4.81%

Volatility and Risk

NMI has a beta of 0.64, suggesting that its stock price is 36% less volatile than the S&P 500. Comparatively, Hagerty has a beta of 0.93, suggesting that its stock price is 7% less volatile than the S&P 500.

Insider & Institutional Ownership

94.1% of NMI shares are held by institutional investors. Comparatively, 20.5% of Hagerty shares are held by institutional investors. 3.0% of NMI shares are held by insiders. Comparatively, 16.7% of Hagerty shares are held 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.

Summary

NMI beats Hagerty on 7 of the 13 factors compared between the two stocks.

About NMI

NMI Holdings, Inc. provides private mortgage guaranty insurance services in the United States. The company offers mortgage insurance services, such as primary and pool insurance; and outsourced loan review services to mortgage loan originators. It serves national and regional mortgage banks, money center banks, credit unions, community banks, builder-owned mortgage lenders, internet-sourced lenders, and other non-bank lenders. The company was incorporated in 2011 and is headquartered in Emeryville, California.

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.