Waterdrop (NYSE:WDH) and MGIC Investment (NYSE:MTG) Head-To-Head Comparison

Waterdrop (NYSE:WDH) and MGIC Investment (NYSE:MTG) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their earnings, institutional ownership, dividends, profitability, analyst recommendations, risk and valuation.

Institutional and Insider Ownership

2.0% of Waterdrop shares are owned by institutional investors. Comparatively, 95.6% of MGIC Investment shares are owned by institutional investors. 24.6% of Waterdrop shares are owned by insiders. Comparatively, 1.3% of MGIC Investment shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Waterdrop and MGIC Investment, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Waterdrop	0	2	0	0	2.00
MGIC Investment	0	4	1	0	2.20

Waterdrop presently has a consensus price target of $2.00, indicating a potential upside of 59.87%. MGIC Investment has a consensus price target of $28.25, indicating a potential upside of 8.32%. Given Waterdrop’s higher possible upside, research analysts plainly believe Waterdrop is more favorable than MGIC Investment.

Earnings & Valuation

This table compares Waterdrop and MGIC Investment”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Waterdrop	$568.81 million	0.79	$81.36 million	$0.21	5.96
MGIC Investment	$1.21 billion	4.54	$738.35 million	$3.15	8.28

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

Dividends

Waterdrop pays an annual dividend of $0.05 per share and has a dividend yield of 4.0%. MGIC Investment pays an annual dividend of $0.60 per share and has a dividend yield of 2.3%. Waterdrop pays out 23.8% of its earnings in the form of a dividend. MGIC Investment pays out 19.0% 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. MGIC Investment has raised its dividend for 6 consecutive years.

Volatility and Risk

Waterdrop has a beta of -0.18, meaning that its stock price is 118% less volatile than the S&P 500. Comparatively, MGIC Investment has a beta of 0.68, meaning that its stock price is 32% less volatile than the S&P 500.

Profitability

This table compares Waterdrop and MGIC Investment’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Waterdrop	12.47%	11.02%	8.30%
MGIC Investment	59.63%	14.01%	10.96%

Summary

MGIC Investment beats Waterdrop on 14 of the 17 factors compared between the two stocks.

About Waterdrop

Waterdrop Inc., through its subsidiaries, provides online insurance brokerage services to match and connect users with related insurance products underwritten by insurance companies in the People's Republic of China. The company offers short-term health and long-term health and life insurance products and services. It also operates a medical crowdfunding platform. Waterdrop Inc. was founded in 2016 and is headquartered in Beijing, the People's Republic of China.

About MGIC Investment

MGIC Investment Corporation, through its subsidiaries, provides private mortgage insurance, other mortgage credit risk management solutions, and ancillary services to lenders and government sponsored entities in the United States, the District of Columbia, Puerto Rico, and Guam. The company offers primary mortgage insurance that provides mortgage default protection on individual loans, as well as covers unpaid loan principal, delinquent interest, and various expenses associated with the default and subsequent foreclosure. It also provides pool insurance for secondary market mortgage transactions; and contract underwriting services, as well as reinsurance. The company serves originators of residential mortgage loans, including savings institutions, commercial banks, mortgage brokers, credit unions, mortgage bankers, and other lenders. MGIC Investment Corporation was founded in 1957 and is headquartered in Milwaukee, Wisconsin.