Critical Analysis: Conifer (NASDAQ:CNFR) versus Bowhead Specialty (NYSE:BOW)

Bowhead Specialty (NYSE:BOW) and Conifer (NASDAQ:CNFR) are both small-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their dividends, risk, institutional ownership, earnings, analyst recommendations, profitability and valuation.

Analyst Ratings

This is a summary of recent recommendations and price targets for Bowhead Specialty and Conifer, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bowhead Specialty	0	3	5	0	2.63
Conifer	0	0	0	0	0.00

Bowhead Specialty presently has a consensus price target of $38.3333, indicating a potential upside of 23.82%. Given Bowhead Specialty’s stronger consensus rating and higher possible upside, equities analysts clearly believe Bowhead Specialty is more favorable than Conifer.

Volatility & Risk

Bowhead Specialty has a beta of -0.69, indicating that its share price is 169% less volatile than the S&P 500. Comparatively, Conifer has a beta of 0.73, indicating that its share price is 27% less volatile than the S&P 500.

Profitability

This table compares Bowhead Specialty and Conifer’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bowhead Specialty	10.05%	13.25%	2.94%
Conifer	48.57%	-123.82%	-13.49%

Earnings and Valuation

This table compares Bowhead Specialty and Conifer”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bowhead Specialty	$425.66 million	2.38	$38.24 million	$1.47	21.06
Conifer	$67.27 million	N/A	$24.35 million	$2.45	0.33

Bowhead Specialty has higher revenue and earnings than Conifer. Conifer is trading at a lower price-to-earnings ratio than Bowhead Specialty, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

34.9% of Conifer shares are owned by institutional investors. 50.9% of Conifer 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.

Summary

Bowhead Specialty beats Conifer on 8 of the 13 factors compared between the two stocks.

About Bowhead Specialty

Bowhead Specialty Holdings Inc. provides specialty property and casualty insurance products in the United States. It underwrites casualty insurance solutions for risks in the construction, distribution, heavy manufacturing, real estate, and hospitality segments; professional liability insurance solutions for financial institutions, private and public directors and officers liability insurance, errors and omissions liability insurance, and cyber segments; and healthcare solutions for hospitals, senior care providers, managed care organizations, miscellaneous medical facilities, and healthcare management liability segments. The company distributes its products through distribution partners in wholesale and retail markets. Bowhead Specialty Holdings Inc. was formerly known as Bowhead Holdings Inc. and changed its name to Bowhead Specialty Holdings Inc. in March 2024. The company was founded in 2020 and is based in New York, New York. Bowhead Specialty Holdings Inc. operates as a subsidiary of Bowhead Insurance Holdings LP.

About Conifer

Conifer Holdings, Inc., an insurance holding company, engages in the sale of property and casualty insurance products. The company offers insurance coverage in specialty commercial and personal product lines. It also underwrites various specialty insurance products, including property, general liability, liquor liability, automobile, and homeowners and dwelling policies. The company serves the commercial insurance needs of owner-operated businesses in the markets, such as hospitality, which includes restaurants, bars, taverns, and bowling centers, as well as small grocery and convenience stores; artisan contractors comprising plumbers, painters, carpenters, electricians, and other independent contractors; and security service providers, including companies that provide security guard services, security alarm products and services, and private investigative services. It offers specialty homeowners insurance products, such as low- value dwelling insurance tailored for owners of lower valued homes in Illinois, Indiana, Louisiana, and Texas; and wholesale agency services comprising commercial and personal lines insurance products for its insurance company subsidiaries, as well as third party insurers. Conifer Holdings, Inc. markets and sells its insurance products through a network of independent agents in 50 states in the United States. The company was incorporated in 2009 and is headquartered in Troy, Michigan.