Critical Analysis: American Integrity Insurance Group (NYSE:AII) vs. Kingsway Financial Services (NYSE:KFS)

American Integrity Insurance Group (NYSE:AII) and Kingsway Financial Services (NYSE:KFS) are both small-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, earnings, valuation, profitability, dividends, institutional ownership and analyst recommendations.

Analyst Recommendations

This is a summary of recent ratings and price targets for American Integrity Insurance Group and Kingsway Financial Services, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
American Integrity Insurance Group	1	1	7	0	2.67
Kingsway Financial Services	1	0	0	0	1.00

American Integrity Insurance Group currently has a consensus target price of $26.80, suggesting a potential upside of 31.44%. Given American Integrity Insurance Group’s stronger consensus rating and higher probable upside, equities research analysts plainly believe American Integrity Insurance Group is more favorable than Kingsway Financial Services.

Valuation and Earnings

This table compares American Integrity Insurance Group and Kingsway Financial Services”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
American Integrity Insurance Group	$204.35 million	1.95	$39.74 million	$4.50	4.53
Kingsway Financial Services	$109.38 million	3.37	-$9.27 million	($0.36)	-35.33

American Integrity Insurance Group has higher revenue and earnings than Kingsway Financial Services. Kingsway Financial Services is trading at a lower price-to-earnings ratio than American Integrity Insurance Group, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares American Integrity Insurance Group and Kingsway Financial Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
American Integrity Insurance Group	31.63%	37.99%	6.85%
Kingsway Financial Services	-8.55%	-76.94%	-5.18%

Institutional and Insider Ownership

72.4% of Kingsway Financial Services shares are owned by institutional investors. 54.8% of Kingsway Financial Services shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

American Integrity Insurance Group beats Kingsway Financial Services on 10 of the 13 factors compared between the two stocks.

About American Integrity Insurance Group

We are a profitable and growing insurance group headquartered in Tampa, Florida. Through our insurance carrier subsidiary, American Integrity Insurance Company of Florida, Inc. (“AIICFL”), we provide personal residential property insurance for single-family homeowners and condominium owners as well as coverage for vacant dwellings and investment properties, predominantly in Florida. 98.6% of our direct premiums written (“DPW”) for the year ended December 31, 2024 and 97.6% of our policies in-force as of December 31, 2024 were in Florida. We are the seventh largest writer of residential property insurance in Florida based on DPW for policies in-force as of December 31, 2024 according to data compiled by the Florida Office of Insurance Regulation (“FLOIR”), making us a leading specialty residential property insurer in the state. We have been a stable, disciplined provider of residential insurance coverage in Florida for more than 19 years. Our management team founded our company in 2006 to capitalize on dislocation in the Florida residential property insurance market following the 2004 and 2005 hurricane seasons, in which a number of severe hurricanes resulted in record insured property losses and caused a number of national insurance companies to retreat from writing residential property insurance in the state. — Florida has a large and growing population with a growing residential property insurance market. According to the U.S. Census Bureau, Florida was the third most populous state in the United States with 23.4 million residents as of July 1, 2024, and recorded the second fastest population growth rate and second greatest nominal increase in population of all states in the U.S. from 2023 to 2024. Population growth supports growth in the property insurance market, which creates opportunity for insurance carriers with the specialized expertise to profitably underwrite property insurance in the Florida market. Florida is a complex property insurance market with a distinct regulatory environment and risk profile due to its geographic location, population centers concentrated along the coast, and elevated threat of property damage from catastrophic weather events including hurricanes, requiring a tailored approach to providing insurance coverage. We believe that consistently delivering underwriting profits in this market requires a high level of focus and specialization, including localized knowledge, market-specific expertise, granular and analytical underwriting and claims management, extensive historical data, effective use of technology, and a deep understanding of Florida’s regulatory environment – all of which we believe we have developed over our 19-year history writing residential property insurance in Florida. We believe this expertise is transferable and repeatable in other Southeastern coastal states. Through active monitoring of local market conditions and prudent risk selection and capital allocation, we seek to be a stable and reliable insurance market for our policyholders and distribution partners, and to consistently deliver best-in-class profitability and value creation for our stockholders. — Our history of profitability and prudent exposure management is matched by our commitment to innovation. We have built a technology-forward platform that we believe augments the expertise of our underwriting and claims teams, enhances our access to risk and claims data, accelerates and improves our underwriting and claims decision making, and improves our distribution partner and policyholder interface. Our use of advanced technology solutions covers the insurance process end-to-end, from risk selection and underwriting to streamlined quoting, policy management and claims handling. Our technology and data capture are critical to our ability to monitor our underwriting results at a granular level, timely modify our underwriting criteria and pricing to respond to changing market conditions, and effectively navigate Florida’s historically volatile property insurance market cycles. We believe the current Florida residential property insurance market presents substantial attractive opportunities for carriers with specialized underwriting and claims expertise, established distribution relationships, advanced technology, and entrepreneurial leadership. Despite historical market-related disruptions and challenges caused by increasing hurricane catastrophe activity and other severe weather events, a general tort environment related to property insurance that led to increased litigation, and reduced insurance capacity as a result of multiple large national insurance carrier exits, we believe the legislative reforms in Florida enacted in late 2022, in addition to Assignment of Benefits (“AOB”) reform, which began in 2019, are proving effective at combating historically rampant property insurance legal system abuse and claims fraud, paving the way for a more stable and resilient property insurance market and greater opportunities for us to profitably underwrite residential property insurance in Florida. Our principal executive offices are located in Tampa, FL.

About Kingsway Financial Services

Kingsway Financial Services Inc., through its subsidiaries, engages in the extended warranty and business services in the United States. The company operates through two segments, Extended Warranty and Kingsway Search Xcelerator. The Extended Warranty segment markets, sells, and administers vehicle service agreements and related products for new and used automobiles, motorcycles, and ATVs. This segment also markets and distributes warranty products to manufacturers, distributors, and installers of heating, ventilation and air conditioning, standby generator, commercial LED lighting, and commercial refrigeration equipment; and provides equipment breakdown and maintenance support services to companies, as well as after-market vehicle protection services. The Kingsway Search Xcelerator offers outsourced finance and human resources consulting services, including operational accounting, such as bookkeeping, accounting, financial reporting, and analysis and strategic finance services; technical accounting comprising initial public offerings, Securities and Exchange Commission reporting, and international consolidation services; human resources, workforce management, and compliance support services; and advisory services. This segment also provides financial executive services for project and interim staffing engagements; search services for permanent placements; healthcare staffing services to acute healthcare facilities for short-term and day-to-day needs of hospitals; software products for the management needs of all types of shared-ownership properties; and fully managed outsourced cardiac telemetry services, as well as provides mobile monitors to the hospitals. The company offers its products and services through credit unions and dealers. Kingsway Financial Services Inc. was incorporated in 1989 and is headquartered in Chicago, Illinois.