Head-To-Head Survey: Federated National (FNHC) vs. Berkshire Hathaway (BRK.A)

Federated National (NASDAQ:FNHC) and Berkshire Hathaway (NYSE:BRK.A) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, dividends, profitability, earnings, analyst recommendations, institutional ownership and valuation.

Earnings & Valuation

This table compares Federated National and Berkshire Hathaway’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Federated National $391.66 million 0.68 $7.98 million $0.60 34.92
Berkshire Hathaway $242.14 billion 2.13 $44.94 billion $8,790.96 35.77

Berkshire Hathaway has higher revenue and earnings than Federated National. Federated National is trading at a lower price-to-earnings ratio than Berkshire Hathaway, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Federated National and Berkshire Hathaway’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Federated National 4.42% 8.13% 1.84%
Berkshire Hathaway 19.78% 5.51% 2.71%

Volatility and Risk

Federated National has a beta of 1.18, indicating that its stock price is 18% more volatile than the S&P 500. Comparatively, Berkshire Hathaway has a beta of 0.9, indicating that its stock price is 10% less volatile than the S&P 500.

Dividends

Federated National pays an annual dividend of $0.32 per share and has a dividend yield of 1.5%. Berkshire Hathaway does not pay a dividend. Federated National pays out 53.3% of its earnings in the form of a dividend. Federated National has raised its dividend for 5 consecutive years.

Analyst Recommendations

This is a summary of recent ratings and price targets for Federated National and Berkshire Hathaway, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Federated National 0 0 1 1 3.50
Berkshire Hathaway 0 0 1 0 3.00

Federated National presently has a consensus target price of $27.00, suggesting a potential upside of 28.88%. Berkshire Hathaway has a consensus target price of $378,000.00, suggesting a potential upside of 20.20%. Given Federated National’s stronger consensus rating and higher probable upside, research analysts plainly believe Federated National is more favorable than Berkshire Hathaway.

Institutional and Insider Ownership

60.0% of Federated National shares are held by institutional investors. Comparatively, 62.2% of Berkshire Hathaway shares are held by institutional investors. 10.8% of Federated National shares are held by company insiders. Comparatively, 4.8% of Berkshire Hathaway shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

Berkshire Hathaway beats Federated National on 9 of the 17 factors compared between the two stocks.

About Federated National

FedNat Holding Company, through its subsidiaries, engages in insurance underwriting, distribution, and claims processing business in the United States. The company underwrites homeowner's multi-peril, personal automobile, commercial general liability, federal flood, and other lines of insurance. It markets and distributes its own and third-party insurers' products, and other services through a network of independent and general agents. The company was formerly known as Federated National Holding Company and changed its name to FedNat Holding Company in May 2018. FedNat Holding Company was founded in 1991 and is based in Sunrise, Florida.

About Berkshire Hathaway

Berkshire Hathaway Inc. is a holding company owning subsidiaries engaged in various business activities. Its segments include Insurance, such as GEICO, Berkshire Hathaway Primary Group, General Re Corporation and Berkshire Hathaway Reinsurance Group; Burlington Northern Santa Fe, LLC, which is engaged in the operation of the railroad system; Berkshire Hathaway Energy, which includes regulated electric and gas utility; Manufacturing, which includes manufacturers of various products, including industrial, consumer and building products; McLane Company, which is engaged in the wholesale distribution of groceries and non-food items; Service and retailing, which includes providers of various services, including fractional aircraft ownership programs, aviation pilot training and various retailing businesses, and Finance and financial products, which includes manufactured housing and related consumer financing, transportation equipment, manufacturing and leasing, and furniture leasing.

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