Critical Analysis: Safety Insurance Group (NASDAQ:SAFT) and Hagerty (NYSE:HGTY)

Safety Insurance Group (NASDAQ:SAFT) and Hagerty (NYSE:HGTY) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, dividends, valuation, risk, institutional ownership, analyst recommendations and earnings.

Valuation and Earnings

This table compares Safety Insurance Group and Hagerty”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Safety Insurance Group	$1.25 billion	0.90	$99.25 million	$6.70	11.41
Hagerty	$1.46 billion	2.53	$49.02 million	$0.33	32.57

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

Institutional and Insider Ownership

81.0% of Safety Insurance Group shares are held by institutional investors. Comparatively, 20.5% of Hagerty shares are held by institutional investors. 2.2% of Safety Insurance Group shares are held by insiders. Comparatively, 16.7% of Hagerty shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Safety Insurance Group and Hagerty, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Safety Insurance Group	0	1	0	0	2.00
Hagerty	0	4	4	0	2.50

Hagerty has a consensus price target of $13.71, suggesting a potential upside of 27.59%. Given Hagerty’s stronger consensus rating and higher probable upside, analysts plainly believe Hagerty is more favorable than Safety Insurance Group.

Risk and Volatility

Safety Insurance Group has a beta of 0.22, suggesting that its stock price is 78% less volatile than the S&P 500. Comparatively, Hagerty has a beta of 0.93, suggesting that its stock price is 7% less volatile than the S&P 500.

Profitability

This table compares Safety Insurance Group and Hagerty’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Safety Insurance Group	7.85%	9.64%	3.54%
Hagerty	5.98%	16.24%	4.81%

Summary

Hagerty beats Safety Insurance Group on 10 of the 14 factors compared between the two stocks.

About Safety Insurance Group

Safety Insurance Group, Inc. provides private passenger and commercial automobile, and homeowner insurance in the United States. The company’s private passenger automobile policies offer coverage for bodily injury and property damage to others, no-fault personal injury coverage for the insured/insured’s car occupants, and physical damage coverage for an insured’s own vehicle for collision or other perils. It also provides commercial automobile policies that offer insurance for commercial vehicles used for business purposes, including private passenger-type vehicles, trucks, tractors and trailers, insure individual vehicles, and commercial fleets; and homeowners policies, which provide coverage for homes, condominiums, and apartments for losses to a dwelling and its contents from various perils, and coverage for liability to others arising from ownership or occupancy. In addition, the company offers business owners policies that cover apartments and residential condominiums, restaurants, office condominiums, processing and services businesses, special trade contractors, and wholesalers. Further, it provides personal umbrella policies, which provide personal excess liability coverage over and above the limits of individual automobile, watercraft, and homeowner’s insurance policies; and commercial umbrella, which offers an excess liability product to clients, as well as underwrites dwelling fire insurance for non-owner-occupied residences. Additionally, the company offers inland marine coverage for homeowners and business owner policies, and watercraft coverage for small and medium sized pleasure crafts. It distributes its products through independent agents. The company was formerly known as Safety Holdings Inc and changed its name to Safety Insurance Group, Inc. in April 2002. Safety Insurance Group, Inc. was founded in 1979 and is headquartered in Boston, Massachusetts.

About Hagerty

Hagerty, Inc. provides insurance agency services worldwide. It offers motor vehicle and boat insurance products; and reinsurance products. The company provides Hagerty Media, which publishes contents through the Hagerty Drivers Club Magazine (HDC), video content, and social media channels; HDC that offers subscription based products and services, including HDC Magazine, automotive enthusiast events, proprietary vehicle valuation tools, emergency roadside services, and special vehicle-related discounts. In addition, it offers HVT, a valuation tool used by the customer to access current and historic pricing data of collector vehicle models. Further, the company offers Hagerty Garage + Social, a platform that provides clubhouses and car storage facilities. Hagerty, Inc. is headquartered in Traverse City, Michigan.