Chubb (NYSE:CB) & Root (NASDAQ:ROOT) Financial Analysis
by Michael Walen · The Markets DailyRoot (NASDAQ:ROOT – Get Free Report) and Chubb (NYSE:CB – Get Free Report) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, risk, earnings, profitability, valuation and dividends.
Profitability
This table compares Root and Chubb’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Root | 3.78% | 19.72% | 3.56% |
| Chubb | 18.10% | 14.47% | 4.19% |
Valuation & Earnings
This table compares Root and Chubb”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Root | $1.52 billion | 0.51 | $40.30 million | $3.54 | 14.08 |
| Chubb | $59.40 billion | 2.21 | $10.31 billion | $28.27 | 12.04 |
Chubb has higher revenue and earnings than Root. Chubb is trading at a lower price-to-earnings ratio than Root, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Root has a beta of 2.92, meaning that its share price is 192% more volatile than the S&P 500. Comparatively, Chubb has a beta of 0.37, meaning that its share price is 63% less volatile than the S&P 500.
Institutional & Insider Ownership
59.8% of Root shares are held by institutional investors. Comparatively, 83.8% of Chubb shares are held by institutional investors. 12.0% of Root shares are held by insiders. Comparatively, 0.4% of Chubb shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Analyst Recommendations
This is a breakdown of recent ratings and price targets for Root and Chubb, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Root | 1 | 5 | 1 | 0 | 2.00 |
| Chubb | 1 | 12 | 7 | 2 | 2.45 |
Root presently has a consensus price target of $62.25, suggesting a potential upside of 24.90%. Chubb has a consensus price target of $360.77, suggesting a potential upside of 5.99%. Given Root’s higher probable upside, equities analysts clearly believe Root is more favorable than Chubb.
Summary
Chubb beats Root on 10 of the 15 factors compared between the two stocks.
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.
About Chubb
Chubb Limited provides insurance and reinsurance products worldwide. The company's North America Commercial P&C Insurance segment offers commercial property, casualty, workers' compensation, package policies, risk management, financial lines, marine, construction, environmental, medical risk, cyber risk, surety, and casualty; and group accident and health insurance to large, middle market, and small commercial businesses. Its North America Personal P&C Insurance segment provides affluent and high net worth individuals and families with homeowners, automobile and collector cars, valuable articles, personal and excess liability, travel insurance, and recreational marine insurance and services. The company's North America Agricultural Insurance segment offers multiple peril crop and crop-hail insurance; and coverage for farm, ranch, and specialty property and casualty, and commercial agriculture products. Its Overseas General Insurance segment provides coverage for traditional commercial property and casualty; specialty categories, such as financial lines, marine, energy, aviation, political risk, and construction; and group accident and health, and traditional and specialty personal lines for corporations, middle markets, and small customers through retail brokers, agents, and other channels. The company's Global Reinsurance segment offers traditional and specialty reinsurance under the Chubb Tempest Re brand to property and casualty companies. Its Life Insurance segment provides protection and savings products comprising whole life, endowment plans, individual and life, group term life, health protection, personal accident, credit life, universal life, group employee benefits, and unit linked contracts. It markets its products primarily through insurance and reinsurance brokers. The company was formerly known as ACE Limited and changed its name to Chubb Limited in January 2016. Chubb Limited was incorporated in 1985 and is headquartered in Zurich, Switzerland.