Analyzing Hippo (NYSE:HIPO) & Brown & Brown (NYSE:BRO)

Brown & Brown (NYSE:BRO) and Hippo (NYSE:HIPO) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, valuation, earnings, profitability, dividends, analyst recommendations and institutional ownership.

Insider & Institutional Ownership

71.0% of Brown & Brown shares are held by institutional investors. Comparatively, 43.0% of Hippo shares are held by institutional investors. 13.1% of Brown & Brown 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, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Brown & Brown	1	14	4	0	2.16
Hippo	0	2	3	2	3.00

Brown & Brown currently has a consensus price target of $76.60, indicating a potential upside of 17.98%. Hippo has a consensus price target of $40.50, indicating a potential upside of 28.80%. Given Hippo’s stronger consensus rating and higher possible upside, analysts plainly believe Hippo is more favorable than Brown & Brown.

Volatility & Risk

Brown & Brown has a beta of 0.58, indicating that its stock price is 42% 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.

Profitability

This table compares Brown & Brown and Hippo’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Brown & Brown	17.75%	13.17%	5.56%
Hippo	23.92%	10.68%	2.32%

Valuation and Earnings

This table compares Brown & Brown and Hippo”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Brown & Brown	$5.90 billion	3.68	$1.05 billion	$3.17	20.48
Hippo	$468.60 million	1.77	$57.70 million	$4.65	6.76

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

Summary

Brown & Brown beats Hippo on 9 of the 15 factors compared between the two stocks.

About Brown & Brown

Brown & Brown, Inc. is an insurance agency, wholesale brokerage, insurance program and service organization. It engages in the provision of insurance brokerage services and casualty insurance underwriting services. It operates through the following segments: Retail, National Programs, Wholesale Brokerage, and Services. The Retail Segment receives fees in lieu of commissions. The National Programs segment acts as a managing general agent and provides professional liability and related package products for certain professionals, a range of insurance products for individuals, flood coverage, and targeted products and services designated for specific industries, trade groups, governmental entities and market niches. The Wholesale Brokerage segment markets and sells excess and surplus commercial and personal lines insurance, primarily through independent agents and brokers, as well as the company’s retail agents. The Services segment provides insurance-related services, including third-party claims administration and comprehensive medical utilization management services in both the workers’ compensation and all-lines liability arenas, as well as Medicare Set-aside services, social security disability and Medicare benefits advocacy services and claims adjusting services. The company was founded by J. Adrian Brown and Charles Covington Owen in 1939 and is headquartered in Daytona Beach, FL.

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.