Head to Head Review: Federated National (NASDAQ:FNHC) versus Berkshire Hathaway (NASDAQ:BRK.B)

Federated National (NASDAQ:FNHC) and Berkshire Hathaway (NYSE:BRK.B) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, risk, analyst recommendations, valuation, institutional ownership, dividends and profitability.

Insider and Institutional Ownership

64.0% of Federated National shares are held by institutional investors. Comparatively, 36.9% of Berkshire Hathaway shares are held by institutional investors. 10.5% of Federated National shares are held by company insiders. Comparatively, 6.1% of Berkshire Hathaway shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Dividends

Federated National pays an annual dividend of $0.36 per share and has a dividend yield of 2.6%. Berkshire Hathaway does not pay a dividend. Federated National pays out 25.7% of its earnings in the form of a dividend.

Valuation and Earnings

This table compares Federated National and Berkshire Hathaway’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Federated National $396.09 million 0.46 $14.93 million $1.40 10.04
Berkshire Hathaway $247.84 billion 2.17 $4.02 billion $10.05 21.86

Berkshire Hathaway has higher revenue and earnings than Federated National. Federated National is trading at a lower price-to-earnings ratio than Berkshire Hathaway, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Federated National has a beta of 0.7, suggesting that its stock price is 30% less volatile than the S&P 500. Comparatively, Berkshire Hathaway has a beta of 0.84, suggesting that its stock price is 16% less volatile than the S&P 500.

Profitability

This table compares Federated National and Berkshire Hathaway’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Federated National -0.35% 0.91% 0.20%
Berkshire Hathaway 10.62% 6.68% 3.38%

Analyst Ratings

This is a breakdown of recent recommendations for Federated National and Berkshire Hathaway, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Federated National 0 1 0 0 2.00
Berkshire Hathaway 0 0 0 0 N/A

Summary

Berkshire Hathaway beats Federated National on 10 of the 13 factors compared between the two stocks.

Federated National Company Profile

FedNat Holding Company, through its subsidiaries, engages in the insurance underwriting, distribution, and claims processing business in the United States. The company is involved in the homeowners, and fire property and casualty insurance; and personal automobile insurance businesses, as well as commercial general liability and federal flood businesses. It markets and distributes its own and third-party insurers' products, and other services through a network of independent and general agents. The company was formerly known as Federated National Holding Company and changed its name to FedNat Holding Company in May 2018. FedNat Holding Company was founded in 1991 and is based in Sunrise, Florida.

Berkshire Hathaway Company Profile

Berkshire Hathaway Inc., through its subsidiaries engages in insurance, freight rail transportation, and utility businesses. It provides property and casualty insurance and reinsurance, as well as life, accident, and health reinsurance; and operates railroad systems in North America. The company also generates, transmits, and distributes electricity primarily from solar, wind, geothermal, and hydro sources; operates natural gas distribution and storage facilities, interstate pipelines, and compressor and meter stations; and holds interest in coal mining assets. In addition, it offers real estate brokerage services; invests in fixed-income and equity instruments; and engages in manufactured housing and finance business, leasing of transportation equipment, and furniture leasing activities. Further, the company manufactures boxed chocolates and other confectionery products; specialty chemicals and metal cutting tools; flooring, insulation, roofing and engineered, building and engineered components, paints and coatings, and bricks and masonry products; recreational vehicles, apparel products, jewelry, and custom picture framing products; and alkaline batteries. Additionally, it manufactures castings and forged components, machined airframe components, and engineered critical fasteners; airfoil castings; titanium and nickel; and seamless pipes, fittings, and forgings. The company distributes newspapers, televisions, and information; franchises and services quick service restaurants; distributes electronic components; and offers steel and logistics services, professional aviation training programs, and fractional aircraft ownership programs. In addition, it retails automobiles; furniture, bedding, and accessories; household appliances, electronics, and computers; jewelry, watches, crystal, china, stemware, flatware, gifts, and collectibles; kitchenware; and motorcycle accessories. The company was founded in 1889 and is headquartered in Omaha, Nebraska.

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