Reviewing Universal Insurance (NYSE:UVE) & Heritage Insurance (NYSE:HRTG)

Heritage Insurance (NYSE:HRTG) and Universal Insurance (NYSE:UVE) are both small-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, risk, analyst recommendations, dividends, earnings, institutional ownership and valuation.

Analyst Ratings

This is a breakdown of recent ratings for Heritage Insurance and Universal Insurance, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Heritage Insurance	0	3	3	0	2.50
Universal Insurance	0	1	0	2	3.33

Heritage Insurance currently has a consensus target price of $37.50, indicating a potential upside of 11.46%. Universal Insurance has a consensus target price of $51.00, indicating a potential upside of 5.81%. Given Heritage Insurance’s higher possible upside, research analysts clearly believe Heritage Insurance is more favorable than Universal Insurance.

Insider & Institutional Ownership

59.0% of Heritage Insurance shares are owned by institutional investors. Comparatively, 66.6% of Universal Insurance shares are owned by institutional investors. 9.2% of Heritage Insurance shares are owned by company insiders. Comparatively, 15.0% of Universal Insurance shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Heritage Insurance and Universal Insurance’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Heritage Insurance	25.07%	39.41%	9.67%
Universal Insurance	13.94%	38.15%	7.63%

Earnings and Valuation

This table compares Heritage Insurance and Universal Insurance”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Heritage Insurance	$847.33 million	1.18	$195.59 million	$7.11	4.73
Universal Insurance	$1.60 billion	0.83	$182.95 million	$8.00	6.03

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

Risk and Volatility

Heritage Insurance has a beta of 0.99, meaning that its stock price is 1% less volatile than the S&P 500. Comparatively, Universal Insurance has a beta of 0.63, meaning that its stock price is 37% less volatile than the S&P 500.

Summary

Heritage Insurance beats Universal Insurance on 8 of the 15 factors compared between the two stocks.

About Heritage Insurance

Heritage Insurance Holdings, Inc. is a property and casualty insurance holding company headquartered in Florida. Through its insurance subsidiaries, the company provides coverage primarily for residential properties, including homeowners, condominium, and dwelling fire policies, as well as insurance for commercial residential properties. Heritage serves customers in Florida and a range of other U.S. markets through regional insurance companies, including subsidiaries focused on the Northeast and Hawaii.

About Universal Insurance

Universal Insurance Holdings, Inc. is a property and casualty insurance holding company whose subsidiaries provide coverage primarily for residential properties. Its products include homeowners, renters, condominium, dwelling fire and other property insurance. The company conducts business through insurance and distribution subsidiaries, serving customers in Florida and other U.S. states. Its operations include underwriting, policy distribution, claims handling and risk management, with products generally sold through independent agents.