Financial Review: Root (NASDAQ:ROOT) & MS&AD Insurance Group (OTCMKTS:MSADY)

Root (NASDAQ:ROOT) and MS&AD Insurance Group (OTCMKTS:MSADY) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, earnings, valuation and risk.

Analyst Recommendations

This is a summary of current ratings for Root and MS&AD Insurance Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Root	1	5	2	0	2.13
MS&AD Insurance Group	0	1	0	0	2.00

Root presently has a consensus target price of $125.80, suggesting a potential upside of 55.36%. Given Root’s stronger consensus rating and higher possible upside, equities analysts clearly believe Root is more favorable than MS&AD Insurance Group.

Valuation and Earnings

This table compares Root and MS&AD Insurance Group”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Root	$1.18 billion	1.07	$30.90 million	$3.31	24.46
MS&AD Insurance Group	$43.74 billion	0.82	$4.56 billion	$3.26	6.81

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

Institutional & Insider Ownership

59.8% of Root shares are held by institutional investors. Comparatively, 0.0% of MS&AD Insurance Group shares are held by institutional investors. 11.8% of Root shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares Root and MS&AD Insurance Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Root	3.80%	23.36%	3.49%
MS&AD Insurance Group	9.93%	17.00%	2.67%

Volatility & Risk

Root has a beta of 2.21, suggesting that its share price is 121% more volatile than the S&P 500. Comparatively, MS&AD Insurance Group has a beta of 0.37, suggesting that its share price is 63% less volatile than the S&P 500.

Summary

Root beats MS&AD Insurance Group on 11 of the 14 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 MS&AD Insurance Group

MS&AD Insurance Group Holdings, Inc., an insurance holding company, provides insurance and financial services worldwide. The company offers domestic non-life insurance; life insurance; international business; financial services; and provides risk-related services. The company was formerly known as Mitsui Sumitomo Insurance Group Holdings, Inc. and changed its name to MS&AD Insurance Group Holdings, Inc. in April 2010. MS&AD Insurance Group Holdings, Inc. was founded in 1918 and is headquartered in Tokyo, Japan.