Comparing Safety Insurance Group (NASDAQ:SAFT) & SelectQuote (NYSE:SLQT)

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

Analyst Ratings

This is a summary of current ratings and target prices for Safety Insurance Group and SelectQuote, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Safety Insurance Group	0	1	1	0	2.50
SelectQuote	2	1	0	1	2.00

SelectQuote has a consensus price target of $3.00, indicating a potential upside of 457.62%. Given SelectQuote’s higher probable upside, analysts clearly believe SelectQuote is more favorable than Safety Insurance Group.

Volatility and Risk

Safety Insurance Group has a beta of 0.16, suggesting that its stock price is 84% less volatile than the S&P 500. Comparatively, SelectQuote has a beta of 1.7, suggesting that its stock price is 70% more volatile than the S&P 500.

Insider and Institutional Ownership

81.0% of Safety Insurance Group shares are owned by institutional investors. Comparatively, 34.6% of SelectQuote shares are owned by institutional investors. 2.2% of Safety Insurance Group shares are owned by company insiders. Comparatively, 13.1% of SelectQuote shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Safety Insurance Group and SelectQuote”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Safety Insurance Group	$1.26 billion	1.20	$99.25 million	$4.64	22.24
SelectQuote	$1.62 billion	0.06	$62.19 million	($0.08)	-6.73

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Safety Insurance Group	5.33%	7.23%	2.58%
SelectQuote	3.84%	19.70%	5.33%

Summary

Safety Insurance Group beats SelectQuote on 8 of the 15 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 SelectQuote

SelectQuote, Inc. operates a technology-enabled, direct-to-consumer distribution platform that sells a range of insurance products and healthcare services in the United States. The company operates through three segments: Senior; Life; and Auto & Home. It distributes senior health policies, such as medicare advantage, medicare supplement, medicare part D, and other ancillary senior health insurance related products, including prescription drugs, dental, vision, and hearing plans; life insurance products, such as term life, final expense, and other ancillary products, including critical illness, accidental death, and juvenile insurance; homeowners, auto, dwelling fire, and other ancillary insurance products; and non-commercial auto and home property, and casualty policies. The company also provides SelectRx, an accredited patient-centered pharmacy home pharmacy, which offers essential prescription medications, OTC medications, customized medication packaging, medication therapy management, and long-term pharmacy care; and population health that helps members understand the benefits available under their health plans, and contracts with insurance carriers. SelectQuote, Inc. was incorporated in 1999 and is headquartered in Overland Park, Kansas.