eHealth (NASDAQ:EHTH) and Safety Insurance Group (NASDAQ:SAFT) Critical Review

eHealth (NASDAQ:EHTH) and Safety Insurance Group (NASDAQ:SAFT) are both small-cap finance companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, analyst recommendations, institutional ownership, dividends, profitability, earnings and risk.

Volatility and Risk

eHealth has a beta of 1.63, indicating that its share price is 63% more volatile than the S&P 500. Comparatively, Safety Insurance Group has a beta of 0.15, indicating that its share price is 85% less volatile than the S&P 500.

Earnings & Valuation

This table compares eHealth and Safety Insurance Group”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
eHealth	$501.69 million	0.03	$40.04 million	($1.16)	-0.44
Safety Insurance Group	$1.26 billion	1.21	$99.25 million	$4.64	22.47

Safety Insurance Group has higher revenue and earnings than eHealth. eHealth 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.

Analyst Recommendations

This is a summary of current ratings and recommmendations for eHealth and Safety Insurance Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
eHealth	1	5	0	0	1.83
Safety Insurance Group	0	1	1	0	2.50

eHealth currently has a consensus target price of $2.19, suggesting a potential upside of 333.25%. Given eHealth’s higher possible upside, equities analysts clearly believe eHealth is more favorable than Safety Insurance Group.

Institutional and Insider Ownership

79.5% of eHealth shares are held by institutional investors. Comparatively, 81.0% of Safety Insurance Group shares are held by institutional investors. 7.2% of eHealth shares are held by company insiders. Comparatively, 2.2% of Safety Insurance Group shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

This table compares eHealth and Safety Insurance Group’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%
Safety Insurance Group	5.33%	7.23%	2.58%

Summary

Safety Insurance Group beats eHealth on 9 of the 14 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 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.