The Travelers Companies (NYSE: TRV) and Berkshire Hathaway (NYSE:BRK-B) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, dividends, valuation, analyst recommendations, institutional ownership, risk and profitability.

Dividends

The Travelers Companies pays an annual dividend of $2.88 per share and has a dividend yield of 2.2%. Berkshire Hathaway does not pay a dividend. The Travelers Companies pays out 28.8% of its earnings in the form of a dividend. The Travelers Companies has raised its dividend for 8 consecutive years.

Insider and Institutional Ownership

77.4% of The Travelers Companies shares are held by institutional investors. 0.8% of The Travelers Companies shares are held 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.

Analyst Recommendations

This is a breakdown of current recommendations for The Travelers Companies and Berkshire Hathaway, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
The Travelers Companies 4 6 7 0 2.18
Berkshire Hathaway 0 0 0 0 N/A

The Travelers Companies currently has a consensus price target of $125.30, suggesting a potential downside of 3.63%. Given The Travelers Companies’ higher possible upside, research analysts clearly believe The Travelers Companies is more favorable than Berkshire Hathaway.

Profitability

This table compares The Travelers Companies and Berkshire Hathaway’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
The Travelers Companies 10.15% 11.68% 2.73%
Berkshire Hathaway 7.57% 5.76% 2.65%

Earnings and Valuation

This table compares The Travelers Companies and Berkshire Hathaway’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
The Travelers Companies $28.15 billion 1.27 $4.86 billion $10.01 12.99
Berkshire Hathaway $232.80 billion 0.00 $43.46 billion N/A N/A

Berkshire Hathaway has higher revenue and earnings than The Travelers Companies.

Summary

The Travelers Companies beats Berkshire Hathaway on 10 of the 14 factors compared between the two stocks.

About The Travelers Companies

The Travelers Companies, Inc. is a holding company. The Company’s segments include Business and International Insurance; Bond & Specialty Insurance, and Personal Insurance. Through its subsidiaries, it provides commercial and personal property and casualty insurance products and services. The Business and International Insurance segment offers property and casualty insurance and insurance related services to its clients, in the United States and in Canada, as well as in the United Kingdom, the Republic of Ireland, Brazil and throughout other parts of the world. The Bond & Specialty Insurance segment provides surety, fidelity, management liability, professional liability, and other property and casualty coverages and related risk management services to a range of primarily domestic customers, utilizing various degrees of financially-based underwriting approaches. The Personal Insurance segment writes a range of property and casualty insurance covering individuals’ personal risks.

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.

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