Comparing Maiden (NASDAQ:MHLD) & Root (NASDAQ:ROOT)

Maiden (NASDAQ:MHLD) and Root (NASDAQ:ROOT) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitability, institutional ownership, valuation, earnings, dividends, risk and analyst recommendations.

Insider & Institutional Ownership

21.8% of Maiden shares are owned by institutional investors. Comparatively, 59.8% of Root shares are owned by institutional investors. 8.2% of Maiden shares are owned by company insiders. Comparatively, 11.7% of Root shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Maiden and Root, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Maiden	0	0	0	0	N/A
Root	0	5	4	0	2.44

Root has a consensus price target of $41.89, suggesting a potential downside of 37.54%. Given Root’s higher possible upside, analysts plainly believe Root is more favorable than Maiden.

Valuation and Earnings

This table compares Maiden and Root’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Maiden	$89.23 million	2.21	-$38.57 million	($0.26)	-7.58
Root	$455.00 million	2.20	-$147.40 million	($7.77)	-8.63

Maiden has higher earnings, but lower revenue than Root. Root is trading at a lower price-to-earnings ratio than Maiden, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Maiden and Root’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Maiden	-26.14%	-7.79%	-1.29%
Root	-17.61%	-62.36%	-8.64%

Volatility and Risk

Maiden has a beta of 1.27, indicating that its stock price is 27% more volatile than the S&P 500. Comparatively, Root has a beta of 2.57, indicating that its stock price is 157% more volatile than the S&P 500.

Summary

Root beats Maiden on 7 of the 13 factors compared between the two stocks.

About Maiden

Maiden Holdings, Ltd., through its subsidiaries, provides property and casualty insurance and reinsurance solutions to regional and specialty insurers in Europe, North America, and internationally. It operates in two segments, Diversified Reinsurance and AmTrust Reinsurance. The company writes treaties on a quota share basis and excess of loss basis. It also offers auto and credit life insurance products through its insurer partners to retail clients; and underwrites risks on a retroactive basis, which provides a range of legacy services to small insurance entities. Maiden Holdings, Ltd. was founded in 2007 and is headquartered in Pembroke, Bermuda.

About Root

Root, Inc. provides insurance products and services in the United States. The company offers automobile, homeowners, and renters insurance products. It operates a direct-to-consumer model; and serves customers primarily through mobile applications, as well as through its website. The company's direct distribution channels also cover digital, media, and referral channels, as well as distribution partners and agencies. Root, Inc. was incorporated in 2015 and is headquartered in Columbus, Ohio.