Comparing Skyward Specialty Insurance Group (NASDAQ:SKWD) & First American Financial (NYSE:FAF)

Skyward Specialty Insurance Group (NASDAQ:SKWD) and First American Financial (NYSE:FAF) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, institutional ownership, dividends, valuation, earnings, profitability and analyst recommendations.

Profitability

This table compares Skyward Specialty Insurance Group and First American Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Skyward Specialty Insurance Group	11.36%	18.24%	3.69%
First American Financial	8.73%	12.58%	3.98%

Valuation and Earnings

This table compares Skyward Specialty Insurance Group and First American Financial”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Skyward Specialty Insurance Group	$1.42 billion	1.35	$170.03 million	$4.15	11.33
First American Financial	$7.45 billion	0.93	$621.80 million	$6.51	10.42

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

Analyst Ratings

This is a breakdown of current ratings for Skyward Specialty Insurance Group and First American Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Skyward Specialty Insurance Group	0	3	6	1	2.80
First American Financial	0	0	6	1	3.14

Skyward Specialty Insurance Group presently has a consensus price target of $65.75, suggesting a potential upside of 39.89%. First American Financial has a consensus price target of $82.50, suggesting a potential upside of 21.65%. Given Skyward Specialty Insurance Group’s higher probable upside, equities research analysts plainly believe Skyward Specialty Insurance Group is more favorable than First American Financial.

Insider and Institutional Ownership

94.8% of Skyward Specialty Insurance Group shares are held by institutional investors. Comparatively, 89.1% of First American Financial shares are held by institutional investors. 8.5% of Skyward Specialty Insurance Group shares are held by insiders. Comparatively, 3.5% of First American Financial shares are held 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.

Risk and Volatility

Skyward Specialty Insurance Group has a beta of 0.54, meaning that its share price is 46% less volatile than the S&P 500. Comparatively, First American Financial has a beta of 1.28, meaning that its share price is 28% more volatile than the S&P 500.

Summary

Skyward Specialty Insurance Group beats First American Financial on 7 of the 13 factors compared between the two stocks.

About Skyward Specialty Insurance Group

Skyward Specialty Insurance Group, Inc., an insurance holding company, underwrites commercial property and casualty insurance products in the United States. It offers general liability, excess liability, professional liability, commercial auto, group accident and health, property, surety, and workers' compensation insurance products. Skyward Specialty Insurance Group, Inc. was incorporated in 2006 and is headquartered in Houston, Texas.

About First American Financial

First American Financial Corporation, through its subsidiaries, provides financial services. It operates through Title Insurance and Services, and Home Warranty segments. The Title Insurance and Services segment issues title insurance policies on residential and commercial property, as well as offers related products and services internationally. This segment also provides closing and/or escrow services; products, services, and solutions to mitigate risk or otherwise facilitate real estate transactions; and appraisals and other valuation-related products and services, lien release and document custodial services, warehouse lending services, default-related products and services, document generation services, mortgage loans subservicing, and related products and services, as well as banking, trust, and wealth management services. In addition, it accommodates tax-deferred exchanges of real estate; and maintains, manages, and provides access to title plant data and records. This segment offers its products through a network of direct operations and agents in various states and in the District of Columbia, as well as in Canada, the United Kingdom, Australia, New Zealand, South Korea, and internationally. The Home Warranty segment provides home warranty products, including residential service contracts that cover residential systems, such as heating and air conditioning systems, and various appliances against failures that occur as the result of normal usage during the coverage period. This segment operates in various states and the District of Columbia. The company was founded in 1889 and is headquartered in Santa Ana, California.