Fairfax Financial (OTCMKTS:FRFHF – Get Rating) and Hippo (NYSE:HIPO – Get Rating) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, earnings, institutional ownership, profitability, dividends, analyst recommendations and valuation.
Institutional and Insider Ownership
0.7% of Fairfax Financial shares are held by institutional investors. 8.9% of Hippo shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Risk & Volatility
Fairfax Financial has a beta of 0.85, indicating that its share price is 15% less volatile than the S&P 500. Comparatively, Hippo has a beta of 0.75, indicating that its share price is 25% less volatile than the S&P 500.
Valuation and Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Fairfax Financial | $28.05 billion | 0.60 | $1.15 billion | $41.58 | 16.60 |
| Hippo | $91.20 million | 4.23 | -$371.40 million | ($14.66) | -1.14 |
Fairfax Financial has higher revenue and earnings than Hippo. Hippo is trading at a lower price-to-earnings ratio than Fairfax Financial, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Fairfax Financial and Hippo’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Fairfax Financial | 4.09% | 6.16% | 1.28% |
| Hippo | -285.35% | -35.79% | -16.66% |
Analyst Recommendations
This is a summary of recent ratings and target prices for Fairfax Financial and Hippo, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Fairfax Financial | 0 | 0 | 1 | 0 | 3.00 |
| Hippo | 0 | 1 | 3 | 0 | 2.75 |
Fairfax Financial currently has a consensus target price of $1,055.00, suggesting a potential upside of 52.83%. Hippo has a consensus target price of $33.63, suggesting a potential upside of 100.99%. Given Hippo’s higher possible upside, analysts clearly believe Hippo is more favorable than Fairfax Financial.
Summary
Fairfax Financial beats Hippo on 10 of the 14 factors compared between the two stocks.
About Fairfax Financial
Fairfax Financial Holdings Ltd. is a holding company, which engages in the provision of property and casualty insurance, and reinsurance, and investment management. It operates through the following segments: Insurance and Reinsurance, Runoff, and Other. The Insurance and Reinsurance segment comprises of Group Re, Bryte Insurance, Advent, Fairfax Latin America and Fairfax Central; and Eastern Europe, which focuses on third party business and specialty property reinsurance and insurance risks. The Runoff segment includes European Run-off, which includes RiverStone (UK) and Syndicate 3500 at Lloyd’s, and U.S. Run-off, which includes TIG Insurance. The Other segment consists of all the non-insurance operations such as Restaurants & Retail, Fairfax India, Thomas Cook India, and Other. The company was founded by Vivian Prem Watsa on March 13, 1951 and is headquartered in Toronto, Canada.
About Hippo
Hippo Holdings Inc. provides home protection insurance in the United States and the District of Columbia. Its insurance products include homeowners' insurance against risks of fire, wind, and theft; and commercial and personal lines of products. The company distributes insurance products and services through its technology platform; and offers its policies online, over the phone, or through licensed insurance agents. It provides care and protection for homeowners, as well as operates an integrated home protection platform. The company is headquartered in Palo Alto, California.
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