Comparing Universal Insurance (NYSE:UVE) and Ryan Specialty (NYSE:RYAN)

Universal Insurance (NYSE:UVE) and Ryan Specialty (NYSE:RYAN) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, valuation, dividends, profitability, analyst recommendations, institutional ownership and risk.

Analyst Ratings

This is a summary of current ratings and price targets for Universal Insurance and Ryan Specialty, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Universal Insurance	0	2	0	1	2.67
Ryan Specialty	1	10	8	0	2.37

Universal Insurance currently has a consensus target price of $45.00, suggesting a potential downside of 5.69%. Ryan Specialty has a consensus target price of $52.21, suggesting a potential upside of 21.84%. Given Ryan Specialty’s higher possible upside, analysts plainly believe Ryan Specialty is more favorable than Universal Insurance.

Risk and Volatility

Universal Insurance has a beta of 0.69, meaning that its stock price is 31% less volatile than the S&P 500. Comparatively, Ryan Specialty has a beta of 0.61, meaning that its stock price is 39% less volatile than the S&P 500.

Profitability

This table compares Universal Insurance and Ryan Specialty’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Universal Insurance	13.49%	37.67%	7.12%
Ryan Specialty	7.55%	43.97%	4.78%

Insider and Institutional Ownership

66.6% of Universal Insurance shares are held by institutional investors. Comparatively, 84.8% of Ryan Specialty shares are held by institutional investors. 15.0% of Universal Insurance shares are held by insiders. Comparatively, 52.0% of Ryan Specialty shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

Universal Insurance pays an annual dividend of $0.64 per share and has a dividend yield of 1.3%. Ryan Specialty pays an annual dividend of $0.52 per share and has a dividend yield of 1.2%. Universal Insurance pays out 8.4% of its earnings in the form of a dividend. Ryan Specialty pays out 72.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Ryan Specialty has increased its dividend for 1 consecutive years. Universal Insurance is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation & Earnings

This table compares Universal Insurance and Ryan Specialty”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Universal Insurance	$1.60 billion	0.83	$182.95 million	$7.58	6.29
Ryan Specialty	$3.05 billion	3.59	$63.40 million	$0.72	59.51

Universal Insurance has higher earnings, but lower revenue than Ryan Specialty. Universal Insurance is trading at a lower price-to-earnings ratio than Ryan Specialty, indicating that it is currently the more affordable of the two stocks.

About Universal Insurance

Universal Insurance Holdings, Inc., together with its subsidiaries, operates as an integrated insurance holding company in the United States. It develops, markets, and underwrites insurance products for personal residential insurance, such as homeowners, renters/tenants, condo unit owners, and dwelling/fire; and offers allied lines, coverage for other structures, and personal property, liability, and personal articles coverages. The company also advises on actuarial issues, oversees distribution, administers claims payments, performs policy administration and underwriting, and assists with reinsurance negotiations; places and manages reinsurance programs for the insurance entities; and operates Clovered.com, a digital agency for various carrier partners and utilization of digital applications for adjusting claims. It offers its products through a network of independent agents, as well as direct-to-consumer online solutions, including digital insurance agency. 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 incorporated in 1990 and is headquartered in Fort Lauderdale, Florida.

About Ryan Specialty

Ryan Specialty Holdings, Inc. operates as a service provider of specialty products and solutions for insurance brokers, agents, and carriers in the United States, Canada, the United Kingdom, Europe, and Singapore. It offers distribution, underwriting, product development, administration, and risk management services by acting as a wholesale broker and a managing underwriter. The company serves commercial, industrial, institutional, and government sectors. Ryan Specialty Holdings, Inc. was founded in 2010 and is headquartered in Chicago, Illinois.