Berkshire Hathaway (NYSE: BRK.A) and Old Republic International (NYSE:ORI) are both mid-cap financials companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, risk, earnings, analyst recommendations, valuation, dividends and institutional ownership.
Old Republic International pays an annual dividend of $0.76 per share and has a dividend yield of 3.7%. Berkshire Hathaway does not pay a dividend. Old Republic International pays out 56.3% of its earnings in the form of a dividend. Old Republic International has raised its dividend for 36 consecutive years.
This table compares Berkshire Hathaway and Old Republic International’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Berkshire Hathaway||$223.60 billion||2.35||$24.07 billion||$11,356.59||28.20|
|Old Republic International||$5.90 billion||0.91||$467.00 million||$1.35||15.01|
Berkshire Hathaway has higher revenue and earnings than Old Republic International. Old Republic International is trading at a lower price-to-earnings ratio than Berkshire Hathaway, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Berkshire Hathaway has a beta of 0.86, indicating that its share price is 14% less volatile than the S&P 500. Comparatively, Old Republic International has a beta of 1.36, indicating that its share price is 36% more volatile than the S&P 500.
This is a summary of current recommendations and price targets for Berkshire Hathaway and Old Republic International, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Old Republic International||0||0||0||1||4.00|
Berkshire Hathaway currently has a consensus target price of $295,000.00, suggesting a potential downside of 7.88%. Old Republic International has a consensus target price of $25.00, suggesting a potential upside of 23.33%. Given Old Republic International’s stronger consensus rating and higher possible upside, analysts clearly believe Old Republic International is more favorable than Berkshire Hathaway.
This table compares Berkshire Hathaway and Old Republic International’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Old Republic International||6.45%||7.50%||1.81%|
Institutional & Insider Ownership
10.0% of Berkshire Hathaway shares are held by institutional investors. Comparatively, 70.6% of Old Republic International shares are held by institutional investors. 5.4% of Berkshire Hathaway shares are held by company insiders. Comparatively, 2.0% of Old Republic International shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Berkshire Hathaway beats Old Republic International on 10 of the 18 factors compared between the two stocks.
Berkshire Hathaway Company Profile
Berkshire Hathaway Inc. is a holding company owning subsidiaries engaged in various business activities. Its segments include Insurance, such as GEICO, Berkshire Hathaway Primary Group, General Re Corporation and Berkshire Hathaway Reinsurance Group; Burlington Northern Santa Fe, LLC, which is engaged in the operation of the railroad system; Berkshire Hathaway Energy, which includes regulated electric and gas utility; Manufacturing, which includes manufacturers of various products, including industrial, consumer and building products; McLane Company, which is engaged in the wholesale distribution of groceries and non-food items; Service and retailing, which includes providers of various services, including fractional aircraft ownership programs, aviation pilot training and various retailing businesses, and Finance and financial products, which includes manufactured housing and related consumer financing, transportation equipment, manufacturing and leasing, and furniture leasing.
Old Republic International Company Profile
Old Republic International Corporation is a holding company. The Company is engaged in business of insurance underwriting and related services. The Company conducts its operations through various regulated insurance company subsidiaries, which are organized into three segments: General Insurance Group, Title Insurance Group and the Republic Financial Indemnity Group (RFIG) Run-off Business. The Company’s General Insurance segment consists of property and liability insurance, and offers coverages to businesses, government and other institutions. The Company’s Title Insurance Group business consists of the issuance of policies to real estate purchasers and investors based upon searches of the public records, which contain information concerning interests in real property. The Company’s RFIG run-off business consists of its mortgage guaranty and consumer credit indemnity (CCI) operations.
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