Heritage Insurance Holdings (NYSE: HRTG) and James River Group Holdings (NASDAQ:JRVR) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, earnings, dividends, institutional ownership, analyst recommendations, risk and profitability.

Earnings & Valuation

This table compares Heritage Insurance Holdings and James River Group Holdings’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Heritage Insurance Holdings $408.34 million 0.83 $45.27 million $0.72 16.01
James River Group Holdings $699.18 million 1.69 $97.44 million $2.65 15.17

James River Group Holdings has higher revenue and earnings than Heritage Insurance Holdings. James River Group Holdings is trading at a lower price-to-earnings ratio than Heritage Insurance Holdings, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Heritage Insurance Holdings and James River Group Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Heritage Insurance Holdings 5.07% 5.67% 1.98%
James River Group Holdings 11.45% 10.80% 3.21%

Dividends

Heritage Insurance Holdings pays an annual dividend of $0.24 per share and has a dividend yield of 2.1%. James River Group Holdings pays an annual dividend of $1.20 per share and has a dividend yield of 3.0%. Heritage Insurance Holdings pays out 33.3% of its earnings in the form of a dividend. James River Group Holdings pays out 45.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Insider & Institutional Ownership

57.6% of Heritage Insurance Holdings shares are owned by institutional investors. Comparatively, 94.6% of James River Group Holdings shares are owned by institutional investors. 16.1% of Heritage Insurance Holdings shares are owned by insiders. Comparatively, 41.0% of James River Group Holdings shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Volatility & Risk

Heritage Insurance Holdings has a beta of 1.29, indicating that its stock price is 29% more volatile than the S&P 500. Comparatively, James River Group Holdings has a beta of 0.55, indicating that its stock price is 45% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and target prices for Heritage Insurance Holdings and James River Group Holdings, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Heritage Insurance Holdings 0 0 3 0 3.00
James River Group Holdings 0 1 2 0 2.67

Heritage Insurance Holdings currently has a consensus target price of $16.33, suggesting a potential upside of 41.66%. James River Group Holdings has a consensus target price of $44.00, suggesting a potential upside of 9.45%. Given Heritage Insurance Holdings’ stronger consensus rating and higher possible upside, equities analysts clearly believe Heritage Insurance Holdings is more favorable than James River Group Holdings.

Summary

James River Group Holdings beats Heritage Insurance Holdings on 11 of the 16 factors compared between the two stocks.

About Heritage Insurance Holdings

Heritage Insurance Holdings, Inc. (Heritage Insurance) is a property and casualty insurance holding company. The Company provides personal and commercial residential insurance. Through its subsidiary, Heritage Property & Casualty Insurance Company (Heritage P&C), it provides personal residential insurance for single-family homeowners and condominium owners, rental property insurance and commercial residential insurance in the state of Florida and North Carolina. The Company is vertically integrated and controls or manages all aspects of insurance underwriting, customer service, actuarial analysis, distribution and claims processing and adjusting. The Company’s primary products are personal and commercial residential insurance, which it offers only in Florida. As of December 31, 2016, it marketed and wrote personal lines voluntary policies through a network of approximately 1,900 independent agents. It had 150,998 voluntary personal residential policies as of December 31, 2016.

About James River Group Holdings

James River Group Holdings, Ltd. (JRG Holdings) is an insurance and reinsurance holding company. The Company operates through four segments: Excess and Surplus Lines, Specialty Admitted Insurance, Casualty Reinsurance, and Corporate and Other. The Excess and Surplus Lines segment offers commercial excess and surplus lines liability and excess property insurance products. The Specialty Admitted Insurance segment offers workers’ compensation insurance coverage, as well as specialty admitted fronting and program business. The Casualty Reinsurance segment offers commercial liability and non-catastrophe property reinsurance to the United States insurance companies and to its the United States-based insurance subsidiaries. The Corporate and Other segment consists of certain management and treasury activities of James River Group, Inc., James River Group Holdings UK Limited and JRG Holdings. It owns six insurance companies focused on specialty insurance niches and a reinsurance company.

Receive News & Ratings for Heritage Insurance Holdings Inc. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Heritage Insurance Holdings Inc. and related companies with MarketBeat.com's FREE daily email newsletter.