Berkshire Hathaway (NYSE:BRK.A) and Fairfax Financial Holdings Ltd Subordinate Voting Shares (OTCMKTS:FRFHF) are both large-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, dividends, analyst recommendations, profitability, institutional ownership and valuation.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Berkshire Hathaway and Fairfax Financial Holdings Ltd Subordinate Voting Shares, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Berkshire Hathaway 0 0 1 0 3.00
Fairfax Financial Holdings Ltd Subordinate Voting Shares 0 0 1 0 3.00

Berkshire Hathaway presently has a consensus target price of $367,000.00, indicating a potential upside of 22.11%. Given Berkshire Hathaway’s higher possible upside, research analysts clearly believe Berkshire Hathaway is more favorable than Fairfax Financial Holdings Ltd Subordinate Voting Shares.

Dividends

Fairfax Financial Holdings Ltd Subordinate Voting Shares pays an annual dividend of $10.00 per share and has a dividend yield of 2.3%. Berkshire Hathaway does not pay a dividend.

Insider & Institutional Ownership

12.5% of Berkshire Hathaway shares are held by institutional investors. Comparatively, 0.9% of Fairfax Financial Holdings Ltd Subordinate Voting Shares shares are held by institutional investors. 4.2% 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 is poised for long-term growth.

Valuation & Earnings

This table compares Berkshire Hathaway and Fairfax Financial Holdings Ltd Subordinate Voting Shares’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Berkshire Hathaway $247.84 billion 1.98 $4.02 billion $15,075.48 19.94
Fairfax Financial Holdings Ltd Subordinate Voting Shares $17.76 billion 0.68 $376.00 million N/A N/A

Berkshire Hathaway has higher revenue and earnings than Fairfax Financial Holdings Ltd Subordinate Voting Shares.

Volatility & Risk

Berkshire Hathaway has a beta of 0.86, indicating that its share price is 14% less volatile than the S&P 500. Comparatively, Fairfax Financial Holdings Ltd Subordinate Voting Shares has a beta of 0.55, indicating that its share price is 45% less volatile than the S&P 500.

Profitability

This table compares Berkshire Hathaway and Fairfax Financial Holdings Ltd Subordinate Voting Shares’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Berkshire Hathaway 11.49% 6.52% 3.30%
Fairfax Financial Holdings Ltd Subordinate Voting Shares 4.53% 4.58% 1.12%

Summary

Berkshire Hathaway beats Fairfax Financial Holdings Ltd Subordinate Voting Shares on 11 of the 12 factors compared between the two stocks.

Berkshire Hathaway Company Profile

Berkshire Hathaway Inc., through its subsidiaries engages in insurance, freight rail transportation, and utility businesses. It provides property and casualty insurance and reinsurance, as well as life, accident, and health reinsurance; and operates railroad systems in North America. The company also generates, transmits, stores, and distributes electricity from natural gas, coal, wind, solar, hydro, nuclear, and geothermal sources; operates natural gas distribution and storage facilities, interstate pipelines, and compressor and meter stations; and holds interest in coal mining assets. In addition, it offers real estate brokerage services; and leases transportation equipment and furniture. Further, the company manufactures boxed chocolates and other confectionery products; specialty chemicals, metal cutting tools, and components for aerospace and power generation applications; flooring, insulation, roofing and engineered, building and engineered components, paints and coatings, and bricks and masonry products, as well as offers homebuilding and manufactured housing finance; recreational vehicles, apparel products, jewelry, and custom picture framing products; and alkaline batteries. Additionally, it manufactures castings, forgings, fasteners/fastener systems, and aerostructures; titanium, steel, and nickel; and seamless pipes and fittings. The company distributes newspapers, televisions, and information; franchises and services quick service restaurants; distributes electronic components; and offers logistics services, grocery and foodservice distribution services, professional aviation training programs, and fractional aircraft ownership programs. In addition, it retails automobiles; furniture, bedding, and accessories; household appliances, electronics, and computers; jewelry, watches, crystal, china, stemware, flatware, gifts, and collectibles; kitchenware; and motorcycle accessories. The company was founded in 1889 and is headquartered in Omaha, Nebraska.

Fairfax Financial Holdings Ltd Subordinate Voting Shares Company Profile

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 also underwrites specialty insurance and reinsurance; develops, produces, markets, and distributes television programs; and franchises, owns, and operates dining restaurants and holiday resorts. In addition, it is involved in the provision of pet medical insurance and database services; retail of tableware and gifts, and home improvement goods, as well as sporting goods and sports apparel comprising golf equipment, consumables, and athletic apparel and accessories; investment of real estate; and provision of integrated travel and travel-related financial services. 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 founded in 1951 and is headquartered in Toronto, Canada.

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