American Coastal Insurance (NASDAQ:ACIC) versus Root (NASDAQ:ROOT) Head to Head Contrast

Root (NASDAQ:ROOT) and American Coastal Insurance (NASDAQ:ACIC) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their dividends, valuation, analyst recommendations, institutional ownership, risk, profitability and earnings.

Profitability

This table compares Root and American Coastal Insurance’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Root	3.80%	23.36%	3.49%
American Coastal Insurance	25.95%	30.06%	6.84%

Institutional & Insider Ownership

59.8% of Root shares are owned by institutional investors. Comparatively, 22.1% of American Coastal Insurance shares are owned by institutional investors. 11.8% of Root shares are owned by company insiders. Comparatively, 49.9% of American Coastal Insurance shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Root and American Coastal Insurance”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Root	$1.18 billion	0.95	$30.90 million	$3.31	21.82
American Coastal Insurance	$296.66 million	2.08	$75.72 million	$1.71	7.39

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

Volatility and Risk

Root has a beta of 2.7, meaning that its share price is 170% more volatile than the S&P 500. Comparatively, American Coastal Insurance has a beta of -0.55, meaning that its share price is 155% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings for Root and American Coastal Insurance, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Root	2	4	2	0	2.00
American Coastal Insurance	0	0	1	0	3.00

Root currently has a consensus price target of $125.80, indicating a potential upside of 74.17%. Given Root’s higher possible upside, equities analysts plainly believe Root is more favorable than American Coastal Insurance.

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 American Coastal Insurance

American Coastal Insurance Corporation operates as a property and casualty insurance holding company that sources, writes, and services residential personal and commercial property, and casualty insurance policies in the United States. The company offers structure, content, and liability coverage for standard single-family homeowners, renters, and condominium unit owners. It also provides commercial multi-peril property insurance for residential condominium associations and apartments, as well as loss or damage to buildings, inventory, and equipment caused by fire, wind, hail, water, theft, and vandalism. In addition, the company offers equipment breakdown, identity theft, cyber security, and flood policies. The company markets and distributes its products through a network of independent agencies. The company was formerly known as United Insurance Holdings Corp. and changed its name to American Coastal Insurance Corporation in August 2023. American Coastal Insurance Corporation was founded in 1999 and is headquartered in Saint Petersburg, Florida.