Contrasting Watford (NASDAQ:WTRE) and Safety Insurance Group (NASDAQ:SAFT)

Watford (NASDAQ:WTRE) and Safety Insurance Group (NASDAQ:SAFT) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, analyst recommendations, dividends, institutional ownership, valuation, earnings and profitability.

Profitability

This table compares Watford and Safety Insurance Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Watford -2.81% -1.82% -0.49%
Safety Insurance Group 10.49% 11.37% 4.46%

Analyst Ratings

This is a summary of current ratings and price targets for Watford and Safety Insurance Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Watford 0 4 1 0 2.20
Safety Insurance Group 0 0 0 0 N/A

Watford presently has a consensus target price of $29.00, suggesting a potential upside of 8.17%. Given Watford’s higher probable upside, research analysts plainly believe Watford is more favorable than Safety Insurance Group.

Insider and Institutional Ownership

18.8% of Watford shares are held by institutional investors. Comparatively, 80.1% of Safety Insurance Group shares are held by institutional investors. 16.6% of Watford shares are held by insiders. Comparatively, 4.8% of Safety Insurance Group shares are held 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.

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Watford $575.23 million 1.00 -$34.88 million N/A N/A
Safety Insurance Group $836.50 million 1.76 $83.19 million N/A N/A

Safety Insurance Group has higher revenue and earnings than Watford.

Summary

Safety Insurance Group beats Watford on 7 of the 10 factors compared between the two stocks.

About Watford

Watford Holdings Ltd., together with its subsidiaries, operates as a property, casualty, and mortgage insurance and reinsurance company worldwide. The company was founded in 2013 and is headquartered in Pembroke, Bermuda.

About Safety Insurance Group

Safety Insurance Group, Inc. provides private passenger and commercial automobile insurance in Massachusetts, New Hampshire, and Maine, the United States. The company's private passenger automobile policies offer coverage for bodily injury and property damage to others, no-fault personal injury coverage for the insured/insured's car occupants, and physical damage coverage for an insured's own vehicle for collision or other perils. It also provides commercial automobile policies that offer insurance for commercial vehicles used for business purposes, including private passenger-type vehicles, trucks, tractors and trailers, insure individual vehicles, and commercial fleets; and homeowners policies, which provide coverage for homes, condominiums, and apartments for losses to a dwelling and its contents from various perils, and coverage for liability to others arising from ownership or occupancy. In addition, the company offers business owners policies that cover apartments and residential condominiums, restaurants, office condominiums, processing and services businesses, special trade contractors, and wholesalers. Further, it provides personal umbrella policies, which provide personal excess liability coverage over and above the limits of individual automobile, watercraft, and homeowner's insurance policies; and commercial umbrella policies, as well as underwrites dwelling fire insurance for non-owner occupied residences. Additionally, the company offers inland marine coverage for homeowners and business owner policies; and watercraft coverage for small and medium sized pleasure crafts. It distributes its products through independent agents. The company was formerly known as Safety Holdings Inc and changed its name to Safety Insurance Group, Inc. in April 2002. Safety Insurance Group, Inc. was founded in 1979 and is based in Boston, Massachusetts.

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