United Insurance (NASDAQ:UIHC – Get Rating) and Root (NASDAQ:ROOT – Get Rating) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their institutional ownership, risk, dividends, profitability, analyst recommendations, earnings and valuation.
Profitability
This table compares United Insurance and Root’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| United Insurance | -38.06% | -977.92% | -14.98% |
| Root | -85.65% | -81.67% | -18.83% |
Analyst Ratings
This is a summary of recent ratings for United Insurance and Root, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| United Insurance | 0 | 0 | 0 | 0 | N/A |
| Root | 1 | 6 | 1 | 0 | 2.00 |
Root has a consensus price target of $10.44, indicating a potential upside of 64.41%. Given Root’s higher possible upside, analysts plainly believe Root is more favorable than United Insurance.
Volatility & Risk
United Insurance has a beta of -0.04, suggesting that its stock price is 104% less volatile than the S&P 500. Comparatively, Root has a beta of 0.95, suggesting that its stock price is 5% less volatile than the S&P 500.
Institutional & Insider Ownership
14.3% of United Insurance shares are owned by institutional investors. Comparatively, 70.4% of Root shares are owned by institutional investors. 55.2% of United Insurance shares are owned by insiders. Comparatively, 27.6% of Root shares are owned by 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.
Earnings and Valuation
This table compares United Insurance and Root’s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| United Insurance | $442.11 million | 0.45 | -$469.86 million | ($4.10) | -1.11 |
| Root | $310.80 million | 0.29 | -$297.70 million | ($18.02) | -0.35 |
Root has lower revenue, but higher earnings than United Insurance. United Insurance is trading at a lower price-to-earnings ratio than Root, indicating that it is currently the more affordable of the two stocks.
Summary
Root beats United Insurance on 7 of the 13 factors compared between the two stocks.
About United Insurance
(Get Rating)
United Insurance Holdings Corp. engages in the residential personal and commercial property and casualty insurance business. It offers insurance relating to homeowners, landlord and seasonal, condominium, flood, renters, and commercial residential. It operates through the Personal Residential Property and Casualty Insurance Policies (Personal Lines), and Commercial Residential Property and Casualty Insurance Policies (Commercial Lines) segments. The company was founded on May 1, 2007 and is headquartered in St. Petersburg, FL.
About Root
(Get Rating)
Root, Inc. provides insurance products and services in the United States. The company offers automobile, homeowners, and renters insurance products. The company operates a direct-to-consumer model and serves customers primarily through mobile applications, as well as through its website. Its direct distribution channels also cover digital, media, and referral channels, as well as distribution partners and agencies. The company was incorporated in 2015 and is headquartered in Columbus, Ohio.
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Alice J. Roden started working for Trending Insurance News at the end of 2021. Alice grew up in Salt Lake City, UT. A writer with a vast insurance industry background Alice has help with several of the biggest insurance companies. Before joining Trending Insurance News, Alice briefly worked as a freelance journalist for several radio stations. She covers home, renters and other property insurance stories.