Greenlight Capital Re (NASDAQ:GLRE) and Brown & Brown (NYSE:BRO) Critical Analysis
by Danessa Lincoln · The Markets DailyGreenlight Capital Re (NASDAQ:GLRE – Get Free Report) and Brown & Brown (NYSE:BRO – Get Free Report) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, profitability, analyst recommendations, dividends, earnings, risk and valuation.
Volatility & Risk
Greenlight Capital Re has a beta of 0.28, suggesting that its stock price is 72% less volatile than the S&P 500. Comparatively, Brown & Brown has a beta of 0.52, suggesting that its stock price is 48% less volatile than the S&P 500.
Earnings & Valuation
This table compares Greenlight Capital Re and Brown & Brown”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Greenlight Capital Re | $729.78 million | 0.72 | $74.83 million | $1.70 | 9.46 |
| Brown & Brown | $5.90 billion | 4.05 | $1.05 billion | $3.16 | 22.78 |
Brown & Brown has higher revenue and earnings than Greenlight Capital Re. Greenlight Capital Re is trading at a lower price-to-earnings ratio than Brown & Brown, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
41.5% of Greenlight Capital Re shares are held by institutional investors. Comparatively, 71.0% of Brown & Brown shares are held by institutional investors. 24.7% of Greenlight Capital Re shares are held by company insiders. Comparatively, 13.1% of Brown & Brown shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Profitability
This table compares Greenlight Capital Re and Brown & Brown’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Greenlight Capital Re | 8.56% | 8.20% | 2.64% |
| Brown & Brown | 17.63% | 13.29% | 5.63% |
Analyst Recommendations
This is a summary of recent ratings and recommmendations for Greenlight Capital Re and Brown & Brown, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Greenlight Capital Re | 0 | 1 | 1 | 0 | 2.50 |
| Brown & Brown | 1 | 13 | 6 | 1 | 2.33 |
Brown & Brown has a consensus price target of $75.47, indicating a potential upside of 4.84%. Given Brown & Brown’s higher probable upside, analysts clearly believe Brown & Brown is more favorable than Greenlight Capital Re.
Summary
Brown & Brown beats Greenlight Capital Re on 13 of the 15 factors compared between the two stocks.
About Greenlight Capital Re
Greenlight Capital Re, Ltd., through its subsidiaries, operates as a property and casualty reinsurance company worldwide. The company offers various property reinsurance products and services, including automobile physical damage, personal lines, and commercial lines. It also provides casualty reinsurance products and services comprising general liability, motor liability, professional liability, and worker's compensation; and accident and health, transactional liability, mortgage insurance, surety, trade credit, marine, and energy, as well as other specialty products, such as aviation, crop, cyber, political, and terrorism products. The company markets its products through reinsurance brokers. Greenlight Capital Re, Ltd. was incorporated in 2004 and is headquartered in Grand Cayman, the Cayman Islands.
About Brown & Brown
Brown & Brown, Inc. is an insurance agency, wholesale brokerage, insurance program and service organization. It engages in the provision of insurance brokerage services and casualty insurance underwriting services. It operates through the following segments: Retail, National Programs, Wholesale Brokerage, and Services. The Retail Segment receives fees in lieu of commissions. The National Programs segment acts as a managing general agent and provides professional liability and related package products for certain professionals, a range of insurance products for individuals, flood coverage, and targeted products and services designated for specific industries, trade groups, governmental entities and market niches. The Wholesale Brokerage segment markets and sells excess and surplus commercial and personal lines insurance, primarily through independent agents and brokers, as well as the company’s retail agents. The Services segment provides insurance-related services, including third-party claims administration and comprehensive medical utilization management services in both the workers’ compensation and all-lines liability arenas, as well as Medicare Set-aside services, social security disability and Medicare benefits advocacy services and claims adjusting services. The company was founded by J. Adrian Brown and Charles Covington Owen in 1939 and is headquartered in Daytona Beach, FL.