Contrasting Brown & Brown (NYSE:BRO) and Hippo (NYSE:HIPO)

Hippo (NYSE:HIPO) and Brown & Brown (NYSE:BRO) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, institutional ownership, earnings, risk, dividends and valuation.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Hippo and Brown & Brown, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hippo	0	2	3	2	3.00
Brown & Brown	1	14	4	0	2.16

Hippo currently has a consensus target price of $40.50, indicating a potential upside of 28.80%. Brown & Brown has a consensus target price of $76.60, indicating a potential upside of 17.98%. Given Hippo’s stronger consensus rating and higher probable upside, analysts clearly believe Hippo is more favorable than Brown & Brown.

Institutional and Insider Ownership

43.0% of Hippo shares are held by institutional investors. Comparatively, 71.0% of Brown & Brown shares are held by institutional investors. 4.5% of Hippo shares are held by company insiders. Comparatively, 13.1% of Brown & Brown shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Hippo and Brown & Brown’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hippo	23.92%	10.68%	2.32%
Brown & Brown	17.75%	13.17%	5.56%

Volatility and Risk

Hippo has a beta of 1.55, suggesting that its share price is 55% more volatile than the S&P 500. Comparatively, Brown & Brown has a beta of 0.58, suggesting that its share price is 42% less volatile than the S&P 500.

Valuation & Earnings

This table compares Hippo and Brown & Brown”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hippo	$468.60 million	1.77	$57.70 million	$4.65	6.76
Brown & Brown	$5.90 billion	3.68	$1.05 billion	$3.17	20.48

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

Summary

Brown & Brown beats Hippo on 9 of the 15 factors compared between the two stocks.

About Hippo

Hippo Holdings Inc. provides property and casualty insurance products to individuals and business customers primarily in the United States. The company operates through three segments: Services, Insurance-as-a-Service, and Hippo Home Insurance Program. Its insurance products include homeowners' insurance against risks of fire, wind, and theft, as well as other personal lines policies from third party carriers; and personal and commercial, as well as home, auto, cyber, small business, life, specialty lines, and other insurance products. The company distributes insurance products and services through its technology platform and website, as well as operates licensed insurance agencies. Hippo Holdings Inc. is headquartered in Palo Alto, California.

About Brown & Brown

Brown & Brown, Inc. is an insurance agency, wholesale brokerage, insurance program and service organization. It engages in the provision of insurance brokerage services and casualty insurance underwriting services. It operates through the following segments: Retail, National Programs, Wholesale Brokerage, and Services. The Retail Segment receives fees in lieu of commissions. The National Programs segment acts as a managing general agent and provides professional liability and related package products for certain professionals, a range of insurance products for individuals, flood coverage, and targeted products and services designated for specific industries, trade groups, governmental entities and market niches. The Wholesale Brokerage segment markets and sells excess and surplus commercial and personal lines insurance, primarily through independent agents and brokers, as well as the company’s retail agents. The Services segment provides insurance-related services, including third-party claims administration and comprehensive medical utilization management services in both the workers’ compensation and all-lines liability arenas, as well as Medicare Set-aside services, social security disability and Medicare benefits advocacy services and claims adjusting services. The company was founded by J. Adrian Brown and Charles Covington Owen in 1939 and is headquartered in Daytona Beach, FL.