Comparing Fanhua (FANH) & Goosehead Insurance (GSHD)

Fanhua (NASDAQ: GSHD) and Goosehead Insurance (NASDAQ:GSHD) are both small-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, valuation, risk, profitability, dividends, earnings and analyst recommendations.

Institutional & Insider Ownership

25.2% of Fanhua shares are owned by institutional investors. Comparatively, 27.2% of Goosehead Insurance shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Fanhua and Goosehead Insurance’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Fanhua $628.39 million 2.36 $69.04 million N/A N/A
Goosehead Insurance N/A N/A N/A N/A N/A

Fanhua has higher revenue and earnings than Goosehead Insurance.

Dividends

Fanhua pays an annual dividend of $0.98 per share and has a dividend yield of 3.8%. Goosehead Insurance does not pay a dividend.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Fanhua and Goosehead Insurance, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Fanhua 0 0 1 0 3.00
Goosehead Insurance 0 1 3 0 2.75

Fanhua currently has a consensus price target of $38.00, suggesting a potential upside of 49.25%. Goosehead Insurance has a consensus price target of $22.33, suggesting a potential downside of 16.82%. Given Fanhua’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Fanhua is more favorable than Goosehead Insurance.

Profitability

This table compares Fanhua and Goosehead Insurance’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Fanhua 14.10% 12.98% 10.51%
Goosehead Insurance N/A N/A N/A

Summary

Fanhua beats Goosehead Insurance on 7 of the 9 factors compared between the two stocks.

Fanhua Company Profile

Fanhua Inc. distributes insurance products in China. It operates through two segments, Insurance Agency and Claims Adjusting. The Insurance Agency segment provides property and casualty insurance products, including automobile, individual accident, travel, disability income, commercial property, construction, and other property and casualty products; and life insurance products, such as individual health, individual whole life, individual term life, individual endowment life, and individual annuity, as well as group life and participating insurance products. The Claims Adjusting segment offers pre-underwriting survey, claims adjusting, disposal of residual value, loading and unloading supervision, and consulting services. The company also operates an online insurance platform baoxian.com, which allows customers to search for, and purchase a range of insurance products; Lan Zhanggui, an internet-based all-in-one application; and ehuzhu.com, an online non-profit mutual aid platform. In addition, it provides value-added services As of March 31, 2018, it consisted of 1 insurance sales and service group, 9 insurance agencies, and 3 claims adjusting firms, with 683 sales and service branches and outlets, 579,348 registered independent sales agents, and 1,253 in-house claims adjustors. The company was formerly known as CNinsure Inc. and changed its name to Fanhua Inc. in December 2016. Fanhua Inc. was founded in 1998 and is headquartered in Guangzhou, China.

Goosehead Insurance Company Profile

Goosehead Insurance, Inc. focuses on operating as a holding company for Goosehead Financial, LLC that provides personal lines insurance agency services in the United States. The company operates through two segments, Corporate Channel and Franchise Channel. It offers various insurance products, including homeowner's insurance; auto insurance; other personal lines products, such as flood, wind, and earthquake insurance; excess liability or umbrella insurance; specialty lines insurance comprising motorcycle, recreational vehicle, and other insurance; commercial lines insurance consisting of general liability, property, and auto insurance for small businesses; and life insurance. The company was founded in 2003 and is headquartered in Westlake, Texas.

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