Critical Survey: Ryan Specialty (NYSE:RYAN) and W.R. Berkley (NYSE:WRB)

Ryan Specialty (NYSE:RYAN) and W.R. Berkley (NYSE:WRB) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, dividends, profitability, earnings, analyst recommendations, institutional ownership and valuation.

Volatility and Risk

Ryan Specialty has a beta of 0.61, indicating that its stock price is 39% less volatile than the S&P 500. Comparatively, W.R. Berkley has a beta of 0.27, indicating that its stock price is 73% less volatile than the S&P 500.

Profitability

This table compares Ryan Specialty and W.R. Berkley’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ryan Specialty	7.55%	43.97%	4.78%
W.R. Berkley	12.94%	19.44%	4.28%

Institutional and Insider Ownership

84.8% of Ryan Specialty shares are held by institutional investors. Comparatively, 68.8% of W.R. Berkley shares are held by institutional investors. 52.0% of Ryan Specialty shares are held by company insiders. Comparatively, 25.1% of W.R. Berkley 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.

Valuation & Earnings

This table compares Ryan Specialty and W.R. Berkley”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ryan Specialty	$3.05 billion	3.21	$63.40 million	$0.72	53.16
W.R. Berkley	$14.71 billion	1.76	$1.78 billion	$4.87	14.31

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

Analyst Recommendations

This is a summary of recent ratings and price targets for Ryan Specialty and W.R. Berkley, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ryan Specialty	1	10	8	0	2.37
W.R. Berkley	6	9	3	0	1.83

Ryan Specialty presently has a consensus target price of $52.50, suggesting a potential upside of 37.17%. W.R. Berkley has a consensus target price of $70.56, suggesting a potential upside of 1.22%. Given Ryan Specialty’s stronger consensus rating and higher probable upside, research analysts plainly believe Ryan Specialty is more favorable than W.R. Berkley.

Dividends

Ryan Specialty pays an annual dividend of $0.52 per share and has a dividend yield of 1.4%. W.R. Berkley pays an annual dividend of $0.40 per share and has a dividend yield of 0.6%. Ryan Specialty pays out 72.2% of its earnings in the form of a dividend. W.R. Berkley pays out 8.2% 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. Ryan Specialty has raised its dividend for 1 consecutive years and W.R. Berkley has raised its dividend for 23 consecutive years.

Summary

Ryan Specialty beats W.R. Berkley on 11 of the 17 factors compared between the two stocks.

About Ryan Specialty

Ryan Specialty Holdings, Inc. operates as a service provider of specialty products and solutions for insurance brokers, agents, and carriers in the United States, Canada, the United Kingdom, Europe, and Singapore. It offers distribution, underwriting, product development, administration, and risk management services by acting as a wholesale broker and a managing underwriter. The company serves commercial, industrial, institutional, and government sectors. Ryan Specialty Holdings, Inc. was founded in 2010 and is headquartered in Chicago, Illinois.

About W.R. Berkley

W. R. Berkley Corporation, an insurance holding company, operates as a commercial lines writers worldwide. It operates in two segments, Insurance and Reinsurance & Monoline Excess. The Insurance segment underwrites commercial insurance business, including excess and surplus lines, admitted lines, and specialty personal lines. This segment also provides accident and health insurance and reinsurance products; insurance for commercial risks; casualty and specialty environmental products; specialized insurance coverages for fine arts and jewelry exposures; excess liability and inland marine coverage for small to medium-sized insureds; and commercial general liability, umbrella, professional liability, directors and officers, commercial property, and surety products, as well as products for technology, and life sciences and travel industries. In addition, this segment offers cyber risk solutions; crime and fidelity insurance products; medical professional coverages; workers' compensation insurance products; general insurance; personal lines insurance solutions, including home, condo/co-op, auto, and collectibles; automobile, law enforcement, public officials and educator's legal, and employment practices liability, as well as incidental medical and property and crime insurance products; at-risk and alternative risk insurance program management services; professional liability; energy and marine risks; and provides insurance products to the Lloyd's marketplace. The Reinsurance & Monoline Excess segment provides treaty and facultative reinsurance solutions; property and casualty reinsurance; facultative reinsurance products include automatic, semi-automatic and individual risk assumed reinsurance; and turnkey products such as cyber, employment practices liability insurance, liquor liability insurance and violent events. The company was founded in 1967 and is headquartered in Greenwich, Connecticut.