Head to Head Comparison: Waterdrop (NYSE:WDH) & James River Group (NASDAQ:JRVR)

Waterdrop (NYSE:WDH) and James River Group (NASDAQ:JRVR) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, analyst recommendations, earnings, institutional ownership, valuation, profitability and risk.

Insider & Institutional Ownership

2.0% of Waterdrop shares are held by institutional investors. Comparatively, 95.2% of James River Group shares are held by institutional investors. 24.6% of Waterdrop shares are held by insiders. Comparatively, 33.8% of James River Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current recommendations for Waterdrop and James River Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Waterdrop	0	2	0	0	2.00
James River Group	0	4	1	0	2.20

Waterdrop presently has a consensus price target of $2.00, suggesting a potential upside of 23.08%. James River Group has a consensus price target of $7.25, suggesting a potential upside of 17.12%. Given Waterdrop’s higher possible upside, analysts clearly believe Waterdrop is more favorable than James River Group.

Risk and Volatility

Waterdrop has a beta of -0.16, meaning that its stock price is 116% less volatile than the S&P 500. Comparatively, James River Group has a beta of -0.03, meaning that its stock price is 103% less volatile than the S&P 500.

Dividends

Waterdrop pays an annual dividend of $0.05 per share and has a dividend yield of 3.1%. James River Group pays an annual dividend of $0.04 per share and has a dividend yield of 0.6%. Waterdrop pays out 23.8% of its earnings in the form of a dividend. James River Group pays out 5.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Earnings and Valuation

This table compares Waterdrop and James River Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Waterdrop	$568.81 million	1.04	$81.36 million	$0.21	7.74
James River Group	$687.61 million	0.41	$47.43 million	$0.73	8.48

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

Profitability

This table compares Waterdrop and James River Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Waterdrop	14.28%	11.34%	8.53%
James River Group	6.90%	12.01%	1.23%

Summary

James River Group beats Waterdrop on 10 of the 16 factors compared between the two stocks.

About Waterdrop

Waterdrop Inc., through its subsidiaries, provides online insurance brokerage services to match and connect users with related insurance products underwritten by insurance companies in the People's Republic of China. The company offers short-term health and long-term health and life insurance products and services. It also operates a medical crowdfunding platform. Waterdrop Inc. was founded in 2016 and is headquartered in Beijing, the People's Republic of China.

About James River Group

James River Group Holdings, Ltd., through its subsidiaries, provides specialty insurance services. It operates through Excess and Surplus Lines, and Specialty Admitted Insurance segments. The Excess and Surplus Lines segment underwrites liability and property insurance in the United States Puerto Rice, and the United States Virgin Islands. This segment distributes its insurance policies primarily through wholesale insurance brokers. The Specialty Admitted Insurance segment provides insurance for fronting, program administrators, managing general agents, and independent retail agents. James River Group Holdings, Ltd. was founded in 2002 and is headquartered in Pembroke, Bermuda.