Analyzing American Financial Group (NYSE:AFG) & Hagerty (NYSE:HGTY)

Hagerty (NYSE:HGTY) and American Financial Group (NYSE:AFG) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, risk, profitability, dividends, valuation, institutional ownership and earnings.

Analyst Recommendations

This is a summary of current ratings and price targets for Hagerty and American Financial Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hagerty	0	5	4	0	2.44
American Financial Group	0	3	2	0	2.40

Hagerty currently has a consensus target price of $13.44, suggesting a potential upside of 11.53%. American Financial Group has a consensus target price of $145.00, suggesting a potential upside of 2.97%. Given Hagerty’s stronger consensus rating and higher probable upside, analysts clearly believe Hagerty is more favorable than American Financial Group.

Profitability

This table compares Hagerty and American Financial Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hagerty	5.11%	11.94%	3.61%
American Financial Group	10.76%	19.50%	2.82%

Institutional and Insider Ownership

20.5% of Hagerty shares are held by institutional investors. Comparatively, 64.4% of American Financial Group shares are held by institutional investors. 3.7% of Hagerty shares are held by company insiders. Comparatively, 16.9% of American Financial Group shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Volatility and Risk

Hagerty has a beta of 0.79, indicating that its stock price is 21% less volatile than the S&P 500. Comparatively, American Financial Group has a beta of 0.62, indicating that its stock price is 38% less volatile than the S&P 500.

Earnings & Valuation

This table compares Hagerty and American Financial Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hagerty	$1.46 billion	2.84	$49.02 million	$0.20	60.27
American Financial Group	$8.17 billion	1.43	$842.00 million	$10.52	13.39

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

About Hagerty

Hagerty, Inc. provides insurance agency services worldwide. It offers motor vehicle and boat insurance products; and reinsurance products. The company provides Hagerty Media, which publishes contents through the Hagerty Drivers Club Magazine (HDC), video content, and social media channels; HDC that offers subscription based products and services, including HDC Magazine, automotive enthusiast events, proprietary vehicle valuation tools, emergency roadside services, and special vehicle-related discounts. In addition, it offers HVT, a valuation tool used by the customer to access current and historic pricing data of collector vehicle models. Further, the company offers Hagerty Garage + Social, a platform that provides clubhouses and car storage facilities. Hagerty, Inc. is headquartered in Traverse City, Michigan.

About American Financial Group

American Financial Group, Inc., an insurance holding company, provides specialty property and casualty insurance products in the United States. The company offers property and transportation insurance products, such as physical damage and liability coverage for buses and trucks, inland and ocean marine, agricultural-related products, and other commercial property and specialty transportation coverages; specialty casualty insurance, including primarily excess and surplus, executive and professional liability, general liability, umbrella and excess liability, and specialty coverage in targeted markets, as well as customized programs for small to mid-sized businesses and workers’ compensation insurance; and specialty financial insurance products comprising risk management insurance programs for lending and leasing institutions, fidelity and surety products, and trade credit insurance. It sells its property and casualty insurance products through independent insurance agents and brokers. The company was founded in 1872 and is headquartered in Cincinnati, Ohio.