Comparing Hagerty (NYSE:HGTY) and Root (NASDAQ:ROOT)

Hagerty (NYSE:HGTY) and Root (NASDAQ:ROOT) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their risk, dividends, valuation, institutional ownership, profitability, earnings and analyst recommendations.

Valuation & Earnings

This table compares Hagerty and Root”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hagerty	$1.20 billion	3.59	$17.02 million	$0.28	44.98
Root	$1.18 billion	0.91	$30.90 million	$3.31	20.82

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

Insider and Institutional Ownership

20.5% of Hagerty shares are owned by institutional investors. Comparatively, 59.8% of Root shares are owned by institutional investors. 16.7% of Hagerty shares are owned by insiders. Comparatively, 11.7% of Root shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Hagerty and Root, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hagerty	0	4	5	0	2.56
Root	1	5	2	0	2.13

Hagerty currently has a consensus target price of $14.13, indicating a potential upside of 12.15%. Root has a consensus target price of $121.60, indicating a potential upside of 76.46%. Given Root’s higher possible upside, analysts plainly believe Root is more favorable than Hagerty.

Profitability

This table compares Hagerty and Root’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hagerty	5.85%	16.85%	4.94%
Root	3.80%	23.36%	3.49%

Risk & Volatility

Hagerty has a beta of 0.89, meaning that its stock price is 11% less volatile than the S&P 500. Comparatively, Root has a beta of 2.7, meaning that its stock price is 170% more volatile than the S&P 500.

Summary

Hagerty beats Root on 8 of the 14 factors compared between the two stocks.

About Hagerty

Hagerty, Inc. provides insurance agency services worldwide. It offers motor vehicle and boat insurance products; and reinsurance products. The company provides Hagerty Media, which publishes contents through the Hagerty Drivers Club Magazine (HDC), video content, and social media channels; HDC that offers subscription based products and services, including HDC Magazine, automotive enthusiast events, proprietary vehicle valuation tools, emergency roadside services, and special vehicle-related discounts. In addition, it offers HVT, a valuation tool used by the customer to access current and historic pricing data of collector vehicle models. Further, the company offers Hagerty Garage + Social, a platform that provides clubhouses and car storage facilities. Hagerty, Inc. is headquartered in Traverse City, Michigan.

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.