Hippo (NYSE:HIPO) & Atlantic American (NASDAQ:AAME) Critical Contrast

Atlantic American (NASDAQ:AAME) and Hippo (NYSE:HIPO) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, risk, earnings, valuation, analyst recommendations, dividends and institutional ownership.

Profitability

This table compares Atlantic American and Hippo’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Atlantic American	N/A	N/A	N/A
Hippo	23.92%	10.68%	2.32%

Risk & Volatility

Atlantic American has a beta of 0.77, indicating that its stock price is 23% less volatile than the S&P 500. Comparatively, Hippo has a beta of 1.55, indicating that its stock price is 55% more volatile than the S&P 500.

Insider and Institutional Ownership

5.5% of Atlantic American shares are held by institutional investors. Comparatively, 43.0% of Hippo shares are held by institutional investors. 80.2% of Atlantic American shares are held by company insiders. Comparatively, 4.5% of Hippo shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Atlantic American and Hippo”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Atlantic American	$188.23 million	0.15	-$4.27 million	$0.22	6.18
Hippo	$468.60 million	1.74	$57.70 million	$4.65	6.63

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

Analyst Recommendations

This is a summary of current recommendations and price targets for Atlantic American and Hippo, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Atlantic American	1	0	0	0	1.00
Hippo	0	2	3	2	3.00

Hippo has a consensus target price of $40.50, suggesting a potential upside of 31.32%. Given Hippo’s stronger consensus rating and higher possible upside, analysts plainly believe Hippo is more favorable than Atlantic American.

Summary

Hippo beats Atlantic American on 14 of the 15 factors compared between the two stocks.

About Atlantic American

Atlantic American Corporation, through its subsidiaries, provides life and health, and property and casualty insurance products in the United States. It operates through American Southern and Bankers Fidelity segments. The company offers property and casualty insurance products, including commercial automobile insurance coverage for state governments, local municipalities, and other motor pools and fleets; general liability; and inland marine insurance products. It also provides surety bond coverage for subdivision construction; school bus contracts; and performance and payment bonds. In addition, the company offers individual and group whole life insurance products; Medicare supplement insurance products; and other accident and health insurance products comprising various individual and group policies for the payment of standard benefits for the treatment of diagnosed cancer and other critical illnesses, as well as various other products, such as short-term nursing facility care, accident only, hospital indemnity, and disability coverages. It markets its products through independent agents and brokers. The company was founded in 1937 and is based in Atlanta, Georgia. Atlantic American Corporation is a subsidiary of Atlantic American / Delta Group.

About Hippo

Hippo Holdings Inc. provides property and casualty insurance products to individuals and business customers primarily in the United States. The company operates through three segments: Services, Insurance-as-a-Service, and Hippo Home Insurance Program. Its insurance products include homeowners' insurance against risks of fire, wind, and theft, as well as other personal lines policies from third party carriers; and personal and commercial, as well as home, auto, cyber, small business, life, specialty lines, and other insurance products. The company distributes insurance products and services through its technology platform and website, as well as operates licensed insurance agencies. Hippo Holdings Inc. is headquartered in Palo Alto, California.