Bowhead Specialty (NYSE:BOW – Get Free Report) and Kingsway Financial Services (NYSE:KFS – Get Free Report) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, earnings, institutional ownership, analyst recommendations, risk, valuation and profitability.
Risk & Volatility
Bowhead Specialty has a beta of -1.05, meaning that its stock price is 205% less volatile than the S&P 500. Comparatively, Kingsway Financial Services has a beta of 0.19, meaning that its stock price is 81% less volatile than the S&P 500.
Earnings and Valuation
This table compares Bowhead Specialty and Kingsway Financial Services”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Bowhead Specialty | $519.18 million | 1.52 | $38.24 million | $1.56 | 15.41 |
| Kingsway Financial Services | $109.38 million | 3.25 | -$9.27 million | ($0.36) | -34.13 |
Bowhead Specialty has higher revenue and earnings than Kingsway Financial Services. Kingsway Financial Services is trading at a lower price-to-earnings ratio than Bowhead Specialty, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Bowhead Specialty and Kingsway Financial Services’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Bowhead Specialty | 10.12% | 13.53% | 2.91% |
| Kingsway Financial Services | -8.55% | -76.94% | -5.18% |
Analyst Ratings
This is a summary of recent ratings and recommmendations for Bowhead Specialty and Kingsway Financial Services, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Bowhead Specialty | 1 | 3 | 5 | 0 | 2.44 |
| Kingsway Financial Services | 1 | 0 | 0 | 0 | 1.00 |
Bowhead Specialty currently has a consensus price target of $33.83, indicating a potential upside of 40.77%. Given Bowhead Specialty’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Bowhead Specialty is more favorable than Kingsway Financial Services.
Insider & Institutional Ownership
72.4% of Kingsway Financial Services shares are owned by institutional investors. 53.8% of Kingsway Financial Services shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Summary
Bowhead Specialty beats Kingsway Financial Services on 10 of the 14 factors compared between the two stocks.
About Bowhead Specialty
Bowhead Specialty Holdings Inc. provides specialty property and casualty insurance products in the United States. It underwrites casualty insurance solutions for risks in the construction, distribution, heavy manufacturing, real estate, and hospitality segments; professional liability insurance solutions for financial institutions, private and public directors and officers liability insurance, errors and omissions liability insurance, and cyber segments; and healthcare solutions for hospitals, senior care providers, managed care organizations, miscellaneous medical facilities, and healthcare management liability segments. The company distributes its products through distribution partners in wholesale and retail markets. Bowhead Specialty Holdings Inc. was formerly known as Bowhead Holdings Inc. and changed its name to Bowhead Specialty Holdings Inc. in March 2024. The company was founded in 2020 and is based in New York, New York. Bowhead Specialty Holdings Inc. operates as a subsidiary of Bowhead Insurance Holdings LP.
About Kingsway Financial Services
Kingsway Financial Services Inc., through its subsidiaries, engages in the extended warranty and business services in the United States. The company operates through two segments, Extended Warranty and Kingsway Search Xcelerator. The Extended Warranty segment markets, sells, and administers vehicle service agreements and related products for new and used automobiles, motorcycles, and ATVs. This segment also markets and distributes warranty products to manufacturers, distributors, and installers of heating, ventilation and air conditioning, standby generator, commercial LED lighting, and commercial refrigeration equipment; and provides equipment breakdown and maintenance support services to companies, as well as after-market vehicle protection services. The Kingsway Search Xcelerator offers outsourced finance and human resources consulting services, including operational accounting, such as bookkeeping, accounting, financial reporting, and analysis and strategic finance services; technical accounting comprising initial public offerings, Securities and Exchange Commission reporting, and international consolidation services; human resources, workforce management, and compliance support services; and advisory services. This segment also provides financial executive services for project and interim staffing engagements; search services for permanent placements; healthcare staffing services to acute healthcare facilities for short-term and day-to-day needs of hospitals; software products for the management needs of all types of shared-ownership properties; and fully managed outsourced cardiac telemetry services, as well as provides mobile monitors to the hospitals. The company offers its products and services through credit unions and dealers. Kingsway Financial Services Inc. was incorporated in 1989 and is headquartered in Chicago, Illinois.
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