Analyzing SelectQuote (NYSE:SLQT) and Hippo (NYSE:HIPO)

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

Analyst Ratings

This is a breakdown of recent ratings and target prices for Hippo and SelectQuote, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hippo	1	2	4	0	2.43
SelectQuote	1	3	0	1	2.20

Hippo currently has a consensus price target of $35.50, suggesting a potential upside of 5.03%. SelectQuote has a consensus price target of $4.38, suggesting a potential upside of 152.16%. Given SelectQuote’s higher probable upside, analysts clearly believe SelectQuote is more favorable than Hippo.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Hippo	21.30%	-5.89%	-1.28%
SelectQuote	3.95%	12.71%	2.76%

Risk and Volatility

Hippo has a beta of 1.56, suggesting that its share price is 56% more volatile than the S&P 500. Comparatively, SelectQuote has a beta of 1.26, suggesting that its share price is 26% more volatile than the S&P 500.

Insider & Institutional Ownership

43.0% of Hippo shares are owned by institutional investors. Comparatively, 34.6% of SelectQuote shares are owned by institutional investors. 10.8% of Hippo 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.

Earnings & Valuation

This table compares Hippo and SelectQuote”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hippo	$372.10 million	2.27	-$40.50 million	$3.62	9.34
SelectQuote	$1.53 billion	0.20	$47.58 million	$0.05	34.70

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

Summary

SelectQuote beats Hippo on 8 of the 15 factors compared between the two stocks.

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.

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.