Berkshire Hathaway (NYSE: BRK.A) and Hallmark Financial Services (NASDAQ:HALL) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, profitability, analyst recommendations, valuation, institutional ownership, risk and dividends.

Profitability

This table compares Berkshire Hathaway and Hallmark Financial Services’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Berkshire Hathaway 9.08% 5.83% 2.66%
Hallmark Financial Services 0.52% 2.05% 0.47%

Volatility & Risk

Berkshire Hathaway has a beta of 0.87, suggesting that its share price is 13% less volatile than the S&P 500. Comparatively, Hallmark Financial Services has a beta of 0.82, suggesting that its share price is 18% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Berkshire Hathaway and Hallmark Financial Services, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Berkshire Hathaway 0 2 0 0 2.00
Hallmark Financial Services 0 0 0 0 N/A

Berkshire Hathaway currently has a consensus target price of $275,000.00, indicating a potential upside of Infinity. Given Berkshire Hathaway’s higher probable upside, analysts plainly believe Berkshire Hathaway is more favorable than Hallmark Financial Services.

Institutional & Insider Ownership

30.6% of Berkshire Hathaway shares are held by institutional investors. Comparatively, 65.6% of Hallmark Financial Services shares are held by institutional investors. 5.4% of Berkshire Hathaway shares are held by insiders. Comparatively, 29.2% of Hallmark Financial Services shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Berkshire Hathaway and Hallmark Financial Services’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Berkshire Hathaway N/A N/A N/A $13,263.00 N/A
Hallmark Financial Services $385.30 million 0.52 $10.79 million $0.10 110.31

Hallmark Financial Services has higher revenue and earnings than Berkshire Hathaway. Berkshire Hathaway is trading at a lower price-to-earnings ratio than Hallmark Financial Services, indicating that it is currently the more affordable of the two stocks.

Summary

Berkshire Hathaway beats Hallmark Financial Services on 6 of the 10 factors compared between the two stocks.

About Berkshire Hathaway

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.

About Hallmark Financial Services

Hallmark Financial Services, Inc. is an insurance holding company. The Company markets, distributes, underwrites and services its property/casualty insurance products to businesses and individuals. Its business involves marketing, distributing, underwriting and servicing insurance products, as well as providing other insurance related services. Its segments include Standard Commercial Segment, Specialty Commercial Segment and Personal Segment. The Company’s Standard Commercial P&C operating unit primarily underwrites low-severity, short-tailed commercial property/casualty insurance products in the standard market. The Company reinsures a portion of the risk it underwrites in order to control the exposure to losses and to protect capital resources. Its Workers Compensation operating unit specializes in small and middle market workers compensation business. Its Specialty Commercial operating unit offers general aviation and satellite launch insurance products and services.

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