Universal Insurance (NYSE:UVE) and Bowhead Specialty (NYSE:BOW) Financial Comparison

Bowhead Specialty (NYSE:BOW) and Universal Insurance (NYSE:UVE) are both small-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, profitability, institutional ownership, dividends, earnings, valuation and risk.

Institutional & Insider Ownership

66.6% of Universal Insurance shares are owned by institutional investors. 16.6% of Universal Insurance shares are owned by 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.

Risk & Volatility

Bowhead Specialty has a beta of -0.88, suggesting that its share price is 188% less volatile than the S&P 500. Comparatively, Universal Insurance has a beta of 0.79, suggesting that its share price is 21% less volatile than the S&P 500.

Valuation & Earnings

This table compares Bowhead Specialty and Universal Insurance”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bowhead Specialty	$425.66 million	1.95	$38.24 million	$1.47	17.19
Universal Insurance	$1.52 billion	0.53	$58.93 million	$2.29	12.38

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

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Bowhead Specialty and Universal Insurance, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bowhead Specialty	0	4	5	0	2.56
Universal Insurance	0	0	1	0	3.00

Bowhead Specialty currently has a consensus price target of $36.50, indicating a potential upside of 44.49%. Given Bowhead Specialty’s higher possible upside, equities analysts plainly believe Bowhead Specialty is more favorable than Universal Insurance.

Profitability

This table compares Bowhead Specialty and Universal Insurance’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bowhead Specialty	10.05%	13.25%	2.94%
Universal Insurance	4.24%	15.37%	2.21%

Summary

Universal Insurance beats Bowhead Specialty on 8 of the 14 factors compared between the two stocks.

About Bowhead Specialty

Bowhead Specialty Holdings Inc. provides specialty property and casualty insurance products in the United States. It underwrites casualty insurance solutions for risks in the construction, distribution, heavy manufacturing, real estate, and hospitality segments; professional liability insurance solutions for financial institutions, private and public directors and officers liability insurance, errors and omissions liability insurance, and cyber segments; and healthcare solutions for hospitals, senior care providers, managed care organizations, miscellaneous medical facilities, and healthcare management liability segments. The company distributes its products through distribution partners in wholesale and retail markets. Bowhead Specialty Holdings Inc. was formerly known as Bowhead Holdings Inc. and changed its name to Bowhead Specialty Holdings Inc. in March 2024. The company was founded in 2020 and is based in New York, New York. Bowhead Specialty Holdings Inc. operates as a subsidiary of Bowhead Insurance Holdings LP.

About Universal Insurance

Universal Insurance Holdings, Inc., together with its subsidiaries, operates as an integrated insurance holding company in the United States. It develops, markets, and underwrites insurance products for personal residential insurance, such as homeowners, renters/tenants, condo unit owners, and dwelling/fire; and offers allied lines, coverage for other structures, and personal property, liability, and personal articles coverages. The company also advises on actuarial issues, oversees distribution, administers claims payments, performs policy administration and underwriting, and assists with reinsurance negotiations; places and manages reinsurance programs for the insurance entities; and operates Clovered.com, a digital agency for various carrier partners and utilization of digital applications for adjusting claims. It offers its products through a network of independent agents, as well as direct-to-consumer online solutions, including digital insurance agency. The company was formerly known as Universal Heights, Inc. and changed its name to Universal Insurance Holdings, Inc. in January 2001. Universal Insurance Holdings, Inc. was incorporated in 1990 and is headquartered in Fort Lauderdale, Florida.