Contrasting Trean Insurance Group (NASDAQ:TIG) and Fairfax Financial (OTCMKTS:FRFHF)

Trean Insurance Group (NASDAQ:TIGGet Rating) and Fairfax Financial (OTCMKTS:FRFHFGet Rating) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, dividends, valuation, analyst recommendations, institutional ownership, risk and profitability.

Insider and Institutional Ownership

87.6% of Trean Insurance Group shares are held by institutional investors. Comparatively, 0.6% of Fairfax Financial shares are held by institutional investors. 9.3% of Trean Insurance Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Trean Insurance Group and Fairfax Financial’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Trean Insurance Group $217.69 million 1.56 $19.33 million $0.43 15.44
Fairfax Financial $26.47 billion 0.46 $3.40 billion $97.82 4.95

Fairfax Financial has higher revenue and earnings than Trean Insurance Group. Fairfax Financial is trading at a lower price-to-earnings ratio than Trean Insurance Group, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Trean Insurance Group and Fairfax Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Trean Insurance Group 9.32% 5.32% 1.53%
Fairfax Financial 10.28% 14.18% 3.20%

Analyst Recommendations

This is a breakdown of current recommendations for Trean Insurance Group and Fairfax Financial, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Trean Insurance Group 0 2 1 0 2.33
Fairfax Financial 0 1 3 0 2.75

Trean Insurance Group currently has a consensus price target of $10.00, suggesting a potential upside of 50.60%. Fairfax Financial has a consensus price target of $883.33, suggesting a potential upside of 82.37%. Given Fairfax Financial’s stronger consensus rating and higher possible upside, analysts clearly believe Fairfax Financial is more favorable than Trean Insurance Group.

Risk and Volatility

Trean Insurance Group has a beta of 0.54, indicating that its share price is 46% less volatile than the S&P 500. Comparatively, Fairfax Financial has a beta of 0.87, indicating that its share price is 13% less volatile than the S&P 500.

Summary

Fairfax Financial beats Trean Insurance Group on 10 of the 14 factors compared between the two stocks.

Trean Insurance Group Company Profile (Get Rating)

Trean Insurance Group, Inc. underwrites specialty casualty insurance products in the United States. The company underwrites business, predominantly workers' compensation, accident and health, and medical professional liability products. It also offers a variety of services, including issuing carrier, claims administration, and reinsurance brokerage services. The company offers its products through program partners and managing general agents. Trean Insurance Group, Inc. was founded in 1996 and is based in Wayzata, Minnesota.

Fairfax Financial Company Profile (Get Rating)

Fairfax Financial Holdings Limited, through its subsidiaries, provides property and casualty insurance and reinsurance, and investment management services in the United States, Canada, Asia, and internationally. The company operates through Insurance and Reinsurance, Run-off, and Non-Insurance Companies segments. It insures against losses to property from fire, explosion, earthquake, windstorm, flood, boiler explosion, machinery breakdown, and construction defects, as well as underwrites automobile, commercial and personal property, and crop insurance. The company also offers workers' compensation, employer's liability, accident and health, medical malpractice, professional liability, and umbrella coverage insurance products; marine, aerospace, surety risk, and other risks and liabilities insurance products; and reinsurance products. In addition, it retails home improvement goods, toys and baby products, golf equipment, sports apparel and accessories, housewares and home d├ęcors, and tableware and gifts; invests in retail business; and owns and operates holiday resorts. Further, the company provides integrated travel and travel-related financial services; originates, processes, and distributes pulses and staple foods; creates, produces, and distributes entertainment content; and provision of pet medical insurance and database services, as well as media and marketing solutions. The company was formerly known as Markel Financial Holdings Limited and changed its name to Fairfax Financial Holdings Limited in 1987. Fairfax Financial Holdings Limited was incorporated in 1951 and is headquartered in Toronto, Canada.

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