Analyzing White Mountains Insurance Group (NYSE:WTM) & Root (NASDAQ:ROOT)

Root (NASDAQ:ROOT) and White Mountains Insurance Group (NYSE:WTM) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, valuation, analyst recommendations, dividends, institutional ownership, risk and earnings.

Volatility & Risk

Root has a beta of 2.54, meaning that its share price is 154% more volatile than the S&P 500. Comparatively, White Mountains Insurance Group has a beta of 0.44, meaning that its share price is 56% less volatile than the S&P 500.

Valuation and Earnings

This table compares Root and White Mountains Insurance Group”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Root	$455.00 million	1.24	-$147.40 million	($7.77)	-4.83
White Mountains Insurance Group	$2.30 billion	1.90	$509.20 million	$221.04	7.70

White Mountains Insurance Group has higher revenue and earnings than Root. Root is trading at a lower price-to-earnings ratio than White Mountains Insurance Group, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Root and White Mountains Insurance Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Root	-9.81%	-50.80%	-6.08%
White Mountains Insurance Group	21.40%	7.62%	3.88%

Analyst Ratings

This is a breakdown of recent ratings and price targets for Root and White Mountains Insurance Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Root	0	4	4	0	2.50
White Mountains Insurance Group	0	0	0	0	N/A

Root currently has a consensus target price of $53.38, indicating a potential upside of 42.14%. Given Root’s higher probable upside, equities analysts plainly believe Root is more favorable than White Mountains Insurance Group.

Insider and Institutional Ownership

59.8% of Root shares are held by institutional investors. Comparatively, 88.7% of White Mountains Insurance Group shares are held by institutional investors. 11.7% of Root shares are held by company insiders. Comparatively, 3.0% of White Mountains Insurance Group shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

White Mountains Insurance Group beats Root on 8 of the 12 factors compared between the two stocks.

About Root

Root, Inc. provides insurance products and services in the United States. The company offers automobile, homeowners, and renters insurance products. It operates a direct-to-consumer model; and serves customers primarily through mobile applications, as well as through its website. The company's direct distribution channels also cover digital, media, and referral channels, as well as distribution partners and agencies. Root, Inc. was incorporated in 2015 and is headquartered in Columbus, Ohio.

About White Mountains Insurance Group

White Mountains Insurance Group, Ltd., through its subsidiaries, provides insurance and other financial services in the United States. The company operates through HG Global/BAM, Ark/WM Outrigger, Kudu, and Other Operations segments. The HG Global/BAM segment provides insurance on municipal bonds issued to finance public purposes, such as schools, utilities, and transportation facilities, as well as reinsurance protection services. The Ark/WM Outrigger segment offers reinsurance and insurance, including property, marine and energy, accident and health, casualty, and specialty products. The Kudu segment provides capital solutions to boutique asset and wealth managers for generational ownership transfers, management buyouts, acquisitions and growth finances, and legacy partner liquidity, as well as strategic assistance to investees. The Other Operations segment offers insurance solutions to travel industry through broker channel and on a direct-to-consumer basis; and manages separate accounts and pooled investment vehicles for insurance-linked securities sectors, including catastrophe bonds, collateralized reinsurance investments, and industry loss warranties of third-party clients. White Mountains Insurance Group, Ltd. was incorporated in 1980 and is headquartered in Hamilton, Bermuda.