Contrasting Root (NASDAQ:ROOT) & Greenlight Capital Re (NASDAQ:GLRE)

Greenlight Capital Re (NASDAQ:GLRE) and Root (NASDAQ:ROOT) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, profitability, dividends, analyst recommendations, earnings, institutional ownership and risk.

Profitability

This table compares Greenlight Capital Re and Root’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Greenlight Capital Re	8.56%	8.26%	2.62%
Root	5.03%	25.10%	4.68%

Earnings and Valuation

This table compares Greenlight Capital Re and Root”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Greenlight Capital Re	$729.78 million	0.72	$74.83 million	$1.70	9.53
Root	$1.52 billion	0.45	$40.30 million	$4.75	9.21

Greenlight Capital Re has higher earnings, but lower revenue than Root. Root is trading at a lower price-to-earnings ratio than Greenlight Capital Re, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Greenlight Capital Re and Root, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Greenlight Capital Re	0	1	1	0	2.50
Root	1	5	1	0	2.00

Root has a consensus target price of $57.75, suggesting a potential upside of 32.07%. Given Root’s higher probable upside, analysts plainly believe Root is more favorable than Greenlight Capital Re.

Volatility and Risk

Greenlight Capital Re has a beta of 0.28, indicating that its share price is 72% less volatile than the S&P 500. Comparatively, Root has a beta of 3.06, indicating that its share price is 206% more volatile than the S&P 500.

Insider and Institutional Ownership

41.5% of Greenlight Capital Re shares are owned by institutional investors. Comparatively, 59.8% of Root shares are owned by institutional investors. 24.7% of Greenlight Capital Re shares are owned by insiders. Comparatively, 12.0% of Root shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

Root beats Greenlight Capital Re on 7 of the 13 factors compared between the two stocks.

About Greenlight Capital Re

Greenlight Capital Re, Ltd., through its subsidiaries, operates as a property and casualty reinsurance company worldwide. The company offers various property reinsurance products and services, including automobile physical damage, personal lines, and commercial lines. It also provides casualty reinsurance products and services comprising general liability, motor liability, professional liability, and worker's compensation; and accident and health, transactional liability, mortgage insurance, surety, trade credit, marine, and energy, as well as other specialty products, such as aviation, crop, cyber, political, and terrorism products. The company markets its products through reinsurance brokers. Greenlight Capital Re, Ltd. was incorporated in 2004 and is headquartered in Grand Cayman, the Cayman Islands.

About Root

Root, Inc. provides insurance products and services in the United States. The company offers automobile, homeowners, and renters insurance products. It operates a direct-to-consumer model; and serves customers primarily through mobile applications, as well as through its website. The company's direct distribution channels also cover digital, media, and referral channels, as well as distribution partners and agencies. Root, Inc. was incorporated in 2015 and is headquartered in Columbus, Ohio.