Reviewing The Hanover Insurance Group (NYSE:THG) and American Coastal Insurance (NASDAQ:ACIC)

American Coastal Insurance (NASDAQ:ACIC) and The Hanover Insurance Group (NYSE:THG) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, profitability, analyst recommendations, dividends, institutional ownership, valuation and risk.

Volatility and Risk

American Coastal Insurance has a beta of -0.55, indicating that its share price is 155% less volatile than the S&P 500. Comparatively, The Hanover Insurance Group has a beta of 0.33, indicating that its share price is 67% less volatile than the S&P 500.

Valuation & Earnings

This table compares American Coastal Insurance and The Hanover 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
American Coastal Insurance	$296.66 million	1.82	$75.72 million	$1.71	6.47
The Hanover Insurance Group	$6.24 billion	0.97	$426.00 million	$17.29	9.79

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

Profitability

This table compares American Coastal Insurance and The Hanover Insurance Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
American Coastal Insurance	25.95%	30.06%	6.84%
The Hanover Insurance Group	9.71%	21.73%	4.30%

Analyst Ratings

This is a breakdown of recent ratings and price targets for American Coastal Insurance and The Hanover Insurance Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
American Coastal Insurance	0	2	0	0	2.00
The Hanover Insurance Group	0	2	5	0	2.71

The Hanover Insurance Group has a consensus target price of $199.00, indicating a potential upside of 17.52%. Given The Hanover Insurance Group’s stronger consensus rating and higher probable upside, analysts clearly believe The Hanover Insurance Group is more favorable than American Coastal Insurance.

Institutional and Insider Ownership

22.1% of American Coastal Insurance shares are held by institutional investors. Comparatively, 86.6% of The Hanover Insurance Group shares are held by institutional investors. 49.9% of American Coastal Insurance shares are held by insiders. Comparatively, 2.5% of The Hanover Insurance Group shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

The Hanover Insurance Group beats American Coastal Insurance on 9 of the 14 factors compared between the two stocks.

About American Coastal Insurance

American Coastal Insurance Corporation operates as a property and casualty insurance holding company that sources, writes, and services residential personal and commercial property, and casualty insurance policies in the United States. The company offers structure, content, and liability coverage for standard single-family homeowners, renters, and condominium unit owners. It also provides commercial multi-peril property insurance for residential condominium associations and apartments, as well as loss or damage to buildings, inventory, and equipment caused by fire, wind, hail, water, theft, and vandalism. In addition, the company offers equipment breakdown, identity theft, cyber security, and flood policies. The company markets and distributes its products through a network of independent agencies. The company was formerly known as United Insurance Holdings Corp. and changed its name to American Coastal Insurance Corporation in August 2023. American Coastal Insurance Corporation was founded in 1999 and is headquartered in Saint Petersburg, Florida.

About The Hanover Insurance Group

The Hanover Insurance Group, Inc., through its subsidiaries, provides various property and casualty insurance products and services in the United States. The company operates through four segments: Core Commercial, Specialty, Personal Lines, and Other. The Commercial Lines segment offers commercial multiple peril, commercial automobile, workers' compensation, and other commercial lines coverage. The Specialty segment provides professional and executive Lines, marine, and surety and other, as well as specialty property and casualty, such as program business, specialty industrial business, excess and surplus business, and specialty general liability coverage. The Personal Lines segment offers personal automobile and homeowner's coverages, as well as other personal coverages, such as personal umbrella, inland marine, fire, personal watercraft, personal cyber, and other miscellaneous coverages. The Other segment markets investment advisory services to institutions, insurance companies, pension funds, and other organizations. The Hanover Insurance Group, Inc. markets its products and services through independent agents and brokers. The company was formerly known as Allmerica Financial Corp. and changed its name to The Hanover Insurance Group, Inc. in December 2005. The Hanover Insurance Group, Inc. was founded in 1852 and is headquartered in Worcester, Massachusetts.