Critical Analysis: HCI Group (NYSE:HCI) and Markel Group (NYSE:MKL)

HCI Group (NYSE:HCI) and Markel Group (NYSE:MKL) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, analyst recommendations, earnings, profitability, valuation, institutional ownership and risk.

Analyst Recommendations

This is a breakdown of current ratings and target prices for HCI Group and Markel Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HCI Group	0	1	5	1	3.00
Markel Group	1	5	0	0	1.83

HCI Group presently has a consensus target price of $250.00, indicating a potential upside of 32.64%. Markel Group has a consensus target price of $2,025.00, indicating a potential upside of 5.15%. Given HCI Group’s stronger consensus rating and higher possible upside, analysts plainly believe HCI Group is more favorable than Markel Group.

Earnings and Valuation

This table compares HCI Group and Markel Group”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HCI Group	$900.95 million	2.60	$299.01 million	$23.20	8.12
Markel Group	$16.17 billion	1.46	$2.11 billion	$140.76	13.68

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

Institutional and Insider Ownership

87.0% of HCI Group shares are held by institutional investors. Comparatively, 77.1% of Markel Group shares are held by institutional investors. 18.5% of HCI Group shares are held by insiders. Comparatively, 1.1% of Markel 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.

Risk and Volatility

HCI Group has a beta of 0.96, suggesting that its share price is 4% less volatile than the S&P 500. Comparatively, Markel Group has a beta of 0.6, suggesting that its share price is 40% less volatile than the S&P 500.

Profitability

This table compares HCI Group and Markel Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
HCI Group	33.48%	28.49%	12.65%
Markel Group	10.44%	7.52%	1.99%

Summary

HCI Group beats Markel Group on 11 of the 15 factors compared between the two stocks.

About HCI Group

HCI Group, Inc., together with its subsidiaries, engages in the property and casualty insurance, insurance management, reinsurance, real estate, and information technology businesses in Florida. It provides residential insurance products, such as homeowners, fire, flood, and wind-only insurance to homeowners, condominium owners, and tenants for properties, as well as offers reinsurance programs. The company also owns and operates waterfront properties and retail shopping centers, and an office building, as well as commercial properties for investment purposes. In addition, it designs and develops web-based applications and products for mobile devices, including SAMS, an online policy administration platform; Harmony, a policy administration platform; ClaimColony, an end-to-end claims management platform; and AtlasViewer, a mapping and data visualization platform. The company was formerly known as Homeowners Choice, Inc. and changed its name to HCI Group, Inc. in May 2013. HCI Group, Inc. was incorporated in 2006 and is headquartered in Tampa, Florida.

About Markel Group

Markel Group Inc., a diverse holding company, engages in marketing and underwriting specialty insurance products in the United States, Bermuda, the United Kingdom, and Germany. The company offers general and professional liability, personal lines, marine and energy, specialty programs, and workers' compensation insurance products; and property coverages that include fire, allied lines, and other specialized property coverages, including catastrophe-exposed property risks, such as earthquake and wind. It also offers credit and surety products, and collateral protection insurance products. In addition, the company offers transaction, directors and officers, and healthcare liability reinsurance; and specialty treaty reinsurance products comprising credit and surety, workers' compensation, marine and energy, public entity, mortgage default, aviation and space, agriculture, and discrete political violence and national terror pools. Further, it provides construction services, consumer and building products, transportation-related products, consulting services, and equipment manufacturing products, as well as healthcare, leasing, and investment services. Additionally, the company operates as an insurance and investment fund manager offering a range of investment products, including insurance-linked securities, catastrophe bonds, insurance swaps, traditional reinsurance contracts, industry loss warranties and other financial instruments; and program services. It also manages funds with third parties. The company was formerly known as Markel Corporation and changed its name to Markel Group Inc. in May 2023. Markel Group Inc. was founded in 1930 and is based in Glen Allen, Virginia.