Head-To-Head Contrast: American Financial Group (NYSE:AFG) and Goosehead Insurance (NASDAQ:GSHD)

Goosehead Insurance (NASDAQ:GSHD) and American Financial Group (NYSE:AFG) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, valuation, risk, analyst recommendations, institutional ownership, earnings and profitability.

Volatility & Risk

Goosehead Insurance has a beta of 1.51, meaning that its share price is 51% more volatile than the S&P 500. Comparatively, American Financial Group has a beta of 0.55, meaning that its share price is 45% less volatile than the S&P 500.

Valuation & Earnings

This table compares Goosehead Insurance and American Financial Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Goosehead Insurance	$365.30 million	4.75	$27.83 million	$1.37	35.66
American Financial Group	$8.17 billion	1.57	$842.00 million	$11.44	13.55

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

Profitability

This table compares Goosehead Insurance and American Financial Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Goosehead Insurance	8.78%	-21.00%	9.43%
American Financial Group	11.51%	20.35%	2.94%

Insider & Institutional Ownership

64.4% of American Financial Group shares are held by institutional investors. 38.1% of Goosehead Insurance shares are held by insiders. Comparatively, 16.9% of American Financial Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Goosehead Insurance and American Financial Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Goosehead Insurance	2	6	6	1	2.40
American Financial Group	0	3	2	0	2.40

Goosehead Insurance presently has a consensus price target of $64.42, indicating a potential upside of 31.86%. American Financial Group has a consensus price target of $152.75, indicating a potential downside of 1.48%. Given Goosehead Insurance’s higher probable upside, research analysts clearly believe Goosehead Insurance is more favorable than American Financial Group.

Summary

Goosehead Insurance beats American Financial Group on 8 of the 14 factors compared between the two stocks.

About Goosehead Insurance

Goosehead Insurance, Inc. operates as a holding company for Goosehead Financial, LLC that engages in the provision of personal lines insurance agency services in the United States. The company offers homeowner’s, automotive, dwelling property, flood, wind, earthquake, excess liability or umbrella, motorcycle, recreational vehicle, general liability, property, and life insurance products and services. As of December 31, 2023, it operated 1,415 franchise locations. The company was founded in 2003 and is headquartered in Westlake, Texas.

About American Financial Group

American Financial Group, Inc., an insurance holding company, provides specialty property and casualty insurance products in the United States. The company offers property and transportation insurance products, such as physical damage and liability coverage for buses and trucks, inland and ocean marine, agricultural-related products, and other commercial property and specialty transportation coverages; specialty casualty insurance, including primarily excess and surplus, executive and professional liability, general liability, umbrella and excess liability, and specialty coverage in targeted markets, as well as customized programs for small to mid-sized businesses and workers’ compensation insurance; and specialty financial insurance products comprising risk management insurance programs for lending and leasing institutions, fidelity and surety products, and trade credit insurance. It sells its property and casualty insurance products through independent insurance agents and brokers. The company was founded in 1872 and is headquartered in Cincinnati, Ohio.