Goosehead Insurance (NASDAQ:GSHD) and Brown & Brown (NYSE:BRO) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their dividends, profitability, valuation, institutional ownership, risk, earnings and analyst recommendations.
Institutional and Insider Ownership
42.1% of Goosehead Insurance shares are owned by institutional investors. Comparatively, 71.2% of Brown & Brown shares are owned by institutional investors. 63.4% of Goosehead Insurance shares are owned by insiders. Comparatively, 17.1% of Brown & Brown shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Profitability
This table compares Goosehead Insurance and Brown & Brown's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Goosehead Insurance | 6.39% | -22.88% | 7.41% |
| Brown & Brown | 17.69% | 12.54% | 5.54% |
Analyst Recommendations
This is a summary of recent ratings and recommmendations for Goosehead Insurance and Brown & Brown, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Goosehead Insurance | 0 | 1 | 2 | 0 | 2.67 |
| Brown & Brown | 1 | 5 | 2 | 0 | 2.13 |
Goosehead Insurance currently has a consensus target price of $73.3333, suggesting a potential downside of 30.60%. Brown & Brown has a consensus target price of $41.7143, suggesting a potential downside of 9.43%. Given Brown & Brown's higher probable upside, analysts plainly believe Brown & Brown is more favorable than Goosehead Insurance.
Risk & Volatility
Goosehead Insurance has a beta of 0.95, suggesting that its share price is 5% less volatile than the S&P 500. Comparatively, Brown & Brown has a beta of 0.71, suggesting that its share price is 29% less volatile than the S&P 500.
Earnings & Valuation
This table compares Goosehead Insurance and Brown & Brown's top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Goosehead Insurance | $77.49 million | 49.83 | $3.57 million | $0.22 | 480.32 |
| Brown & Brown | $2.39 billion | 5.45 | $398.51 million | $1.40 | 32.90 |
Brown & Brown has higher revenue and earnings than Goosehead Insurance. Brown & Brown is trading at a lower price-to-earnings ratio than Goosehead Insurance, indicating that it is currently the more affordable of the two stocks.
Summary
Brown & Brown beats Goosehead Insurance on 7 of the 13 factors compared between the two stocks.
