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

Valuation & Earnings

This table compares Watford and Universal Insurance’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Watford $575.23 million 0.83 -$34.88 million N/A N/A
Universal Insurance $823.82 million 1.01 $117.05 million N/A N/A

Universal Insurance has higher revenue and earnings than Watford.

Institutional & Insider Ownership

18.8% of Watford shares are owned by institutional investors. Comparatively, 73.5% of Universal Insurance shares are owned by institutional investors. 16.6% of Watford shares are owned by insiders. Comparatively, 11.3% of Universal Insurance shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Watford and Universal Insurance’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%
Universal Insurance 9.94% 22.28% 6.51%

Analyst Recommendations

This is a summary of recent recommendations and price targets for Watford and Universal Insurance, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Watford 0 4 1 0 2.20
Universal Insurance 1 0 0 0 1.00

Watford presently has a consensus target price of $29.00, suggesting a potential upside of 30.57%. Universal Insurance has a consensus target price of $27.00, suggesting a potential upside of 8.30%. Given Watford’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Watford is more favorable than Universal Insurance.

Summary

Universal Insurance beats Watford on 7 of the 11 factors compared between the two stocks.

Watford Company Profile

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.

Universal Insurance Company Profile

Universal Insurance Holdings, Inc., together with its subsidiaries, operates as an integrated insurance holding company in the United States. The company develops, markets, and underwrites insurance products for personal residential homeowner's insurance. It also provides personal residential insurance, such as homeowners, renters/tenants, condo unit owners, and dwelling/fire, and commercial residential multi-peril; and allied lines, coverage for other structures, and personal property, as well as liability and personal articles coverages. In addition, the company offers policy and claims administration, and reinsurance intermediary services, as well as operates Universal Direct, a direct-to-consumer online platform, which enables homeowners to directly purchase, pay for, and bind homeowners' policies. It provides its products through a network of independent agents. The company was formerly known as Universal Heights, Inc. and changed its name to Universal Insurance Holdings, Inc. in January 2001. Universal Insurance Holdings, Inc. was founded in 1990 and is headquartered in Fort Lauderdale, Florida.

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