Head-To-Head Contrast: GAINSCO (OTCMKTS:GANS) versus Heritage Insurance (NYSE:HRTG)

GAINSCO (OTCMKTS:GANS) and Heritage Insurance (NYSE:HRTG) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, earnings, analyst recommendations, institutional ownership, profitability, valuation and risk.

Institutional and Insider Ownership

67.4% of Heritage Insurance shares are owned by institutional investors. 73.5% of GAINSCO shares are owned by insiders. Comparatively, 12.0% of Heritage Insurance shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares GAINSCO and Heritage Insurance’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
GAINSCO $393.54 million 0.98 $20.21 million N/A N/A
Heritage Insurance $511.30 million 0.58 $28.64 million $0.95 11.18

Heritage Insurance has higher revenue and earnings than GAINSCO.

Analyst Recommendations

This is a breakdown of current ratings and target prices for GAINSCO and Heritage Insurance, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
GAINSCO 0 0 0 0 N/A
Heritage Insurance 0 0 3 0 3.00

Heritage Insurance has a consensus target price of $15.33, indicating a potential upside of 44.38%. Given Heritage Insurance’s higher probable upside, analysts plainly believe Heritage Insurance is more favorable than GAINSCO.

Risk and Volatility

GAINSCO has a beta of -1.03, meaning that its share price is 203% less volatile than the S&P 500. Comparatively, Heritage Insurance has a beta of 0.64, meaning that its share price is 36% less volatile than the S&P 500.

Profitability

This table compares GAINSCO and Heritage Insurance’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
GAINSCO N/A N/A N/A
Heritage Insurance 3.38% 4.26% 0.97%

Summary

Heritage Insurance beats GAINSCO on 9 of the 11 factors compared between the two stocks.

About GAINSCO

GAINSCO, Inc. operates as a property and casualty insurance holding company. The company offers non-standard personal auto products, including coverage for third party liability, bodily injury, and physical damage, as well as collision and coverage for theft, physical damage, and other perils for an insured's vehicle. It is also involved in automotive sales and service, auto racing, and investment activities. The company offers its automobile insurance products under the GAINSCO Auto Insurance brand through independent partner agents and Website comparison shopping places. GAINSCO, Inc. was founded in 1978 and is based in Dallas, Texas.

About Heritage Insurance

Heritage Insurance Holdings, Inc., through its subsidiaries, provides personal and commercial residential insurance products. The company offers personal residential property insurance for single-family homeowners and condominium owners; rental property insurance; and commercial residential insurance in Alabama, Connecticut, Florida, Georgia, Hawaii, Massachusetts, New York, New Jersey, North Carolina, Rhode Island, and South Carolina, as well as residential wind-only property and multi-peril property insurance. As of December 31, 2019, it had approximately 522,442 personal residential policies; 2,533 commercial residential policies; and 6,970 commercial general liability policies. The company markets and writes its voluntary personal line policies through a network of retail independent agents, wholesale agents, and a partnership with a direct agency, as well as indirectly to approximately 1,500 retail locations through 8 wholesale agency relationships. It also provides restoration, and emergency and recovery services; and property management, retail agency, and reinsurance services. The company was founded in 2012 and is headquartered in Clearwater, Florida.

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