Critical Review: Gainsco (OTCMKTS:GANS) and Stewart Information Services (NYSE:STC)

Stewart Information Services (NYSE:STC) and Gainsco (OTCMKTS:GANS) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their dividends, institutional ownership, valuation, earnings, analyst recommendations, profitability and risk.

Institutional & Insider Ownership

96.9% of Stewart Information Services shares are held by institutional investors. 2.9% of Stewart Information Services shares are held by company insiders. Comparatively, 73.5% of Gainsco shares are held by company 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.

Profitability

This table compares Stewart Information Services and Gainsco’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Stewart Information Services	4.19%	10.07%	5.17%
Gainsco	N/A	N/A	N/A

Analyst Recommendations

This is a summary of recent ratings for Stewart Information Services and Gainsco, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Stewart Information Services	0	1	4	0	2.80
Gainsco	0	0	0	0	0.00

Stewart Information Services currently has a consensus target price of $81.67, indicating a potential upside of 17.61%. Given Stewart Information Services’ stronger consensus rating and higher possible upside, research analysts clearly believe Stewart Information Services is more favorable than Gainsco.

Earnings and Valuation

This table compares Stewart Information Services and Gainsco”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Stewart Information Services	$3.09 billion	0.68	$115.54 million	$4.48	15.50
Gainsco	N/A	N/A	N/A	N/A	N/A

Stewart Information Services has higher revenue and earnings than Gainsco.

Summary

Stewart Information Services beats Gainsco on 8 of the 9 factors compared between the two stocks.

About Stewart Information Services

Stewart Information Services Corporation, through its subsidiaries, provides title insurance and real estate transaction related services in the United States and internationally. The company involves in searching, examining, closing, and insuring the condition of the title to real property. It also offers home and personal insurance services; services for tax-deferred exchanges; and digital customer engagement platform services. It also provides appraisal management, online notarization and closing, credit and real estate information, and search and valuation services. The company serves homebuyers and sellers, residential and commercial real estate professionals, mortgage lenders and servicers, title agencies and real estate attorneys, and home builders through direct operations, network of independent agencies, and other businesses. The company was founded in 1893 and is headquartered in Houston, Texas.

About Gainsco

GAINSCO, Inc. operates as a property and casualty insurance holding company. The company offers non-standard personal auto products, including coverage for third party liability, bodily injury, and physical damage, as well as collision and coverage for theft, physical damage, and other perils for an insured's vehicle. It is also involved in automotive sales and service, auto racing, and investment activities. The company offers its automobile insurance products under the GAINSCO Auto Insurance brand through independent partner agents and Website comparison shopping places. GAINSCO, Inc. was founded in 1978 and is based in Dallas, Texas.