Reviewing Mercury General (NYSE:MCY) and eHealth (NASDAQ:EHTH)

eHealth (NASDAQ:EHTH) and Mercury General (NYSE:MCY) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, valuation, risk, profitability, analyst recommendations, earnings and institutional ownership.

Volatility & Risk

eHealth has a beta of 1.63, suggesting that its stock price is 63% more volatile than the S&P 500. Comparatively, Mercury General has a beta of 0.89, suggesting that its stock price is 11% less volatile than the S&P 500.

Earnings and Valuation

This table compares eHealth and Mercury General”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
eHealth	$554.01 million	0.04	$40.04 million	($1.16)	-0.61
Mercury General	$6.34 billion	0.89	$541.09 million	$16.92	6.04

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

Profitability

This table compares eHealth and Mercury General’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
eHealth	5.42%	6.13%	2.92%
Mercury General	14.77%	31.98%	8.19%

Institutional & Insider Ownership

79.5% of eHealth shares are held by institutional investors. Comparatively, 42.4% of Mercury General shares are held by institutional investors. 7.2% of eHealth shares are held by company insiders. Comparatively, 35.5% of Mercury General shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent recommendations for eHealth and Mercury General, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
eHealth	1	5	0	0	1.83
Mercury General	0	0	1	1	3.50

eHealth presently has a consensus price target of $2.19, suggesting a potential upside of 208.62%. Given eHealth’s higher probable upside, equities analysts plainly believe eHealth is more favorable than Mercury General.

Summary

Mercury General beats eHealth on 12 of the 15 factors compared between the two stocks.

About eHealth

eHealth, Inc. operates a health insurance marketplace that provides consumer engagement, education, and health insurance enrollment solutions in the United States. The company operates in two segments, Medicare; and Employer and Individual. The Medicare segment offers sale of Medicare-related health insurance plans, which includes Medicare advantage, Medicare Supplement, and Medicare Part D prescription drug plans to Medicare-eligible customers including but not limited to, dental, and vision insurance, as well as advertising program for marketing and other services. The Employer and Individual segment engages in the sale of individual, family, and small business health insurance plans; and ancillary products to non-Medicare-eligible customers including but not limited to, dental, vision, and short and long term disability insurance. In addition, the company provides ecommerce platforms and consumer engagement solutions, which includes market leading information, decision support, customer engagement, and transactional services to group of health insurance consumers; and organize and present the insurance information in objective format to individuals, families, and small businesses to research, analyze, compare and purchase health insurance plans. Further, it markets health insurance plans through its websites, including eHealth.com, eHealthInsurance.com, eHealthMedicare.com, Medicare.com, PlanPrescriber.com, and GoMedigap.com. The company also offers online sponsorship and advertising, non-broker of record, lead referral, technology licensing, as well as performs various post-enrollment services for members in Medicare health insurance plans. eHealth, Inc. was incorporated in 1997 and is headquartered in Austin, Texas.

About Mercury General

Mercury General Corporation, together with its subsidiaries, engages in writing personal automobile insurance in the United States. The company also writes homeowners, commercial automobile, commercial property, mechanical protection, and umbrella insurance products. Its automobile insurance products include collision, property damage, bodily injury, comprehensive, personal injury protection, underinsured and uninsured motorist, and other hazards; and homeowners insurance products comprise dwelling, liability, personal property, and other coverages. The company sells its policies through a network of independent agents, insurance agencies, as well as directly through internet sales portals in Arizona, California, Florida, Georgia, Illinois, Nevada, New Jersey, New York, Oklahoma, Texas, and Virginia. Mercury General Corporation was founded in 1961 and is headquartered in Los Angeles, California.