Berkshire Hathaway (NYSE: BRK-B) and Alleghany Corporation (NYSE:Y) are both financials companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitability, dividends, institutional ownership, risk, valuation, earnings and analyst recommendations.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Berkshire Hathaway and Alleghany Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Berkshire Hathaway 0 0 0 0 N/A
Alleghany Corporation 0 1 1 0 2.50

Alleghany Corporation has a consensus target price of $625.00, indicating a potential upside of 10.72%. Given Alleghany Corporation’s higher probable upside, analysts plainly believe Alleghany Corporation is more favorable than Berkshire Hathaway.

Profitability

This table compares Berkshire Hathaway and Alleghany Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Berkshire Hathaway 7.57% 5.76% 2.65%
Alleghany Corporation 7.74% 5.70% 1.93%

Earnings and Valuation

This table compares Berkshire Hathaway and Alleghany Corporation’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Berkshire Hathaway $232.80 billion 0.00 $43.46 billion N/A N/A
Alleghany Corporation $6.16 billion 1.41 $888.24 million $30.86 18.29

Berkshire Hathaway has higher revenue and earnings than Alleghany Corporation.

Insider & Institutional Ownership

81.8% of Alleghany Corporation shares are held by institutional investors. 4.0% of Alleghany Corporation shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Alleghany Corporation beats Berkshire Hathaway on 6 of the 11 factors compared between the two stocks.

About Berkshire Hathaway

Berkshire Hathaway Inc. is a holding company owning subsidiaries engaged in various business activities. Its segments include Insurance, such as GEICO, Berkshire Hathaway Primary Group, General Re Corporation and Berkshire Hathaway Reinsurance Group; Burlington Northern Santa Fe, LLC, which is engaged in the operation of the railroad system; Berkshire Hathaway Energy, which includes regulated electric and gas utility; Manufacturing, which includes manufacturers of various products, including industrial, consumer and building products; McLane Company, which is engaged in the wholesale distribution of groceries and non-food items; Service and retailing, which includes providers of various services, including fractional aircraft ownership programs, aviation pilot training and various retailing businesses, and Finance and financial products, which includes manufactured housing and related consumer financing, transportation equipment, manufacturing and leasing, and furniture leasing.

About Alleghany Corporation

Alleghany Corporation is an insurance holding company. The Company, through its subsidiary Alleghany Insurance Holdings LLC (AIHL) and its subsidiaries, is engaged in the property and casualty insurance business. AIHL’s insurance operations are conducted by its subsidiaries RSUI Group, Inc. (RSUI), CapSpecialty, Inc. (CapSpecialty) and Pacific Compensation Corporation (PacificComp). Its segments include reinsurance and insurance. Its reinsurance segment consists of property and casualty reinsurance operations conducted by Transatlantic Holdings, Inc. reinsurance operating subsidiaries. Its insurance segment consists of property and casualty insurance operations conducted by AIHL through its insurance operating subsidiaries RSUI, CapSpecialty and PacificComp. AIHL Re LLC, which is a captive reinsurance company, provides reinsurance to its insurance operating subsidiaries and affiliates.

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