Brown & Brown (NYSE: BRO) and Kingstone Companies (NASDAQ:KINS) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, profitabiliy, risk, institutional ownership, valuation, dividends and earnings.

Volatility & Risk

Brown & Brown has a beta of 0.78, suggesting that its stock price is 22% less volatile than the S&P 500. Comparatively, Kingstone Companies has a beta of 0.68, suggesting that its stock price is 32% less volatile than the S&P 500.

Insider & Institutional Ownership

72.6% of Brown & Brown shares are owned by institutional investors. Comparatively, 40.0% of Kingstone Companies shares are owned by institutional investors. 17.0% of Brown & Brown shares are owned by insiders. Comparatively, 10.3% of Kingstone Companies shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Dividends

Brown & Brown pays an annual dividend of $0.54 per share and has a dividend yield of 1.2%. Kingstone Companies pays an annual dividend of $0.32 per share and has a dividend yield of 2.0%. Brown & Brown pays out 29.0% of its earnings in the form of a dividend. Kingstone Companies pays out 26.7% 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. Brown & Brown has increased its dividend for 16 consecutive years. Kingstone Companies is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of recent recommendations for Brown & Brown and Kingstone Companies, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Brown & Brown 1 7 1 0 2.00
Kingstone Companies 0 0 1 0 3.00

Brown & Brown presently has a consensus price target of $43.50, indicating a potential downside of 1.27%. Kingstone Companies has a consensus price target of $16.00, indicating a potential upside of 0.95%. Given Kingstone Companies’ stronger consensus rating and higher probable upside, analysts plainly believe Kingstone Companies is more favorable than Brown & Brown.

Profitability

This table compares Brown & Brown and Kingstone Companies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Brown & Brown 14.52% 11.10% 4.99%
Kingstone Companies 12.34% 15.00% 5.39%

Earnings & Valuation

This table compares Brown & Brown and Kingstone Companies’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Brown & Brown $1.80 billion 3.43 $573.34 million $1.86 23.69
Kingstone Companies $79.64 million 2.11 $16.03 million $1.20 13.21

Brown & Brown has higher revenue and earnings than Kingstone Companies. Kingstone Companies is trading at a lower price-to-earnings ratio than Brown & Brown, indicating that it is currently the more affordable of the two stocks.

Summary

Brown & Brown beats Kingstone Companies on 10 of the 16 factors compared between the two stocks.

About Brown & Brown

Brown & Brown, Inc. is a diversified insurance agency, wholesale brokerage, insurance programs and service company. The Company markets and sells insurance products and services, in the property, casualty and employee benefits areas. It provides its customers with non-investment insurance contracts, as well as other customized risk management products and services. It operates through four segments: the Retail Segment, which provides a range of insurance products and services to commercial, public and quasi-public entities, and to professional and individual customers; the National Programs Segment, which acts as a managing general agent, provides professional liability and related package products; the Wholesale Brokerage Segment, which markets and sells excess and surplus commercial and personal lines insurance, and the Services Segment, which provides insurance-related services, including third-party claims administration and medical utilization management services.

About Kingstone Companies

Kingstone Companies, Inc. offers property and casualty insurance products to small businesses and individuals in New York State. The Company offers these products through its subsidiary, Kingstone Insurance Company (KICO). KICO is a licensed property and casualty insurance company. The Company operates through property and casualty insurances segment, which offers a range of property and casualty policies to its producers. The Company underwrites its business utilizing the CLUE industry claims database, insurance scoring reports, physical inspection of risks and other individual risk underwriting tools. It writes homeowners and dwelling fire business in New York City and Long Island. The Company’s product lines include personal lines, commercial liability, commercial automobile, livery physical damage and other. Its personal lines consist of homeowners, dwelling fire, renters, equipment breakdown and service line endorsements and personal umbrella policies.

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