Analyzing Waterdrop (NYSE:WDH) and TWFG (NASDAQ:TWFG)

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

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TWFG	0	3	6	0	2.67
Waterdrop	0	0	0	0	0.00

TWFG currently has a consensus target price of $30.43, indicating a potential downside of 8.76%. Given TWFG’s stronger consensus rating and higher probable upside, research analysts plainly believe TWFG is more favorable than Waterdrop.

Valuation & Earnings

This table compares TWFG and Waterdrop”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TWFG	$172.93 million	2.86	$26.10 million	N/A	N/A
Waterdrop	$370.53 million	1.11	$23.06 million	$0.09	12.33

TWFG has higher earnings, but lower revenue than Waterdrop.

Profitability

This table compares TWFG and Waterdrop’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TWFG	N/A	N/A	N/A
Waterdrop	9.71%	5.67%	4.28%

Insider and Institutional Ownership

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

Summary

Waterdrop beats TWFG on 6 of the 11 factors compared between the two stocks.

About TWFG

TWFG, Inc. operates an independent distribution platform for personal and commercial insurance products in the United States. Its personal and commercial insurance products include auto, home, renters, life, health, motorcycle, umbrella, boat, recreational vehicle, flood, wind, event, luxury item, general liability, property, business auto, workers’ compensation, business owner policy, and professional liability insurance products, as well as commercial bonds and group benefits. The company was founded in 2001 and is based in The Woodlands, Texas. TWFG, Inc. operates as a subsidiary of Bunch Family Holdings, LLC.

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.