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

Dividends

XL Group pays an annual dividend of $0.88 per share and has a dividend yield of 2.4%. Berkshire Hathaway does not pay a dividend. XL Group pays out -71.5% of its earnings in the form of a dividend. Berkshire Hathaway has raised its dividend for 4 consecutive years.

Insider and Institutional Ownership

38.2% of Berkshire Hathaway shares are held by institutional investors. Comparatively, 99.1% of XL Group shares are held by institutional investors. 6.1% of Berkshire Hathaway shares are held by insiders. Comparatively, 3.0% of XL Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Berkshire Hathaway and XL Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Berkshire Hathaway 1 2 2 0 2.20
XL Group 1 6 6 0 2.38

Berkshire Hathaway currently has a consensus target price of $201.33, indicating a potential upside of 2.49%. XL Group has a consensus target price of $44.91, indicating a potential upside of 21.80%. Given XL Group’s stronger consensus rating and higher probable upside, analysts plainly believe XL Group is more favorable than Berkshire Hathaway.

Volatility & Risk

Berkshire Hathaway has a beta of 0.87, meaning that its share price is 13% less volatile than the S&P 500. Comparatively, XL Group has a beta of 1, meaning that its share price has a similar volatility profile to the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Berkshire Hathaway 7.73% 5.17% 2.36%
XL Group -2.51% -4.03% -0.83%

Valuation & Earnings

This table compares Berkshire Hathaway and XL Group’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Berkshire Hathaway $223.60 billion 2.17 $24.07 billion $11,356.59 0.02
XL Group $10.55 billion 0.90 $440.96 million ($1.23) -29.98

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

Summary

Berkshire Hathaway beats XL Group on 9 of the 16 factors compared between the two stocks.

Berkshire Hathaway Company Profile

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.

XL Group Company Profile

XL Group plc is an insurance and reinsurance company providing property, casualty and specialty products to industrial, commercial and professional firms, insurance companies and other enterprises. The Company operates through two segments: Insurance and Reinsurance. The Company’s Insurance segment is organized into four product divisions: Global Casualty (Casualty); Global Energy Property, & Construction (EPC); Global Professional (Professional), and Global Specialty (Specialty). Its insurance operations provide insurance policies for corporate risks that may require large limits, use of a captive insurance company and the need for a program of locally issued policies. The Reinsurance segment provides casualty, property risk, property catastrophe, specialty, and other reinsurance lines on a global basis with business being written on both a proportional and non-proportional treaty basis, and also on a facultative basis.

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