Analyzing eHealth (EHTH) and Brown & Brown (BRO)

eHealth (NASDAQ: EHTH) and Brown & Brown (NYSE:BRO) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, institutional ownership, risk, valuation, dividends and profitability.

Volatility and Risk

eHealth has a beta of 1.56, indicating that its share price is 56% more volatile than the S&P 500. Comparatively, Brown & Brown has a beta of 0.78, indicating that its share price is 22% less volatile than the S&P 500.

Dividends

Brown & Brown pays an annual dividend of $0.54 per share and has a dividend yield of 1.2%. eHealth does not pay a dividend. Brown & Brown pays out 29.0% of its earnings in the form of a dividend. Brown & Brown has raised its dividend for 16 consecutive years.

Insider and Institutional Ownership

93.6% of eHealth shares are owned by institutional investors. Comparatively, 72.6% of Brown & Brown shares are owned by institutional investors. 6.2% of eHealth shares are owned by company insiders. Comparatively, 17.0% of Brown & Brown shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares eHealth and Brown & Brown’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
eHealth -3.44% -5.64% -4.50%
Brown & Brown 14.52% 11.10% 4.99%

Valuation and Earnings

This table compares eHealth and Brown & Brown’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
eHealth $182.74 million 1.77 -$4.31 million ($0.35) -50.08
Brown & Brown $1.80 billion 3.39 $575.43 million $1.86 23.41

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

Analyst Recommendations

This is a summary of current ratings and recommmendations for eHealth and Brown & Brown, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
eHealth 0 1 3 0 2.75
Brown & Brown 1 7 1 0 2.00

eHealth presently has a consensus target price of $17.67, suggesting a potential upside of 0.78%. Brown & Brown has a consensus target price of $43.50, suggesting a potential downside of 0.09%. Given eHealth’s stronger consensus rating and higher probable upside, equities analysts plainly believe eHealth is more favorable than Brown & Brown.

Summary

Brown & Brown beats eHealth on 10 of the 16 factors compared between the two stocks.

eHealth Company Profile

eHealth, Inc. provides a private online source of health insurance for individuals, families and small businesses. The Company is the parent company of eHealthInsurance, a private health insurance exchange where individuals, families and small businesses can compare health insurance products from various insurers side-by-side, and purchase and enroll in coverage online through its Websites (www.eHealth.com, www.eHealthInsurance.com, www.eHealthMedicare.com, www.Medicare.com and www.PlanPrescriber.com) or telephonically through its customer care centers. The Company also offers various online and pharmacy-based tools to help seniors navigate Medicare health insurance options, choose the right plan, and enroll in plans online or telephonically. It markets the availability of individual and family, small business and ancillary health insurance plans of various insurance carriers through its e-commerce platforms (www.eHealth.com and www.eHealthInsurance.com).

Brown & Brown Company Profile

Brown & Brown, Inc. is a diversified insurance agency, wholesale brokerage, insurance programs and service company. The Company markets and sells insurance products and services, in the property, casualty and employee benefits areas. It provides its customers with non-investment insurance contracts, as well as other customized risk management products and services. It operates through four segments: the Retail Segment, which provides a range of insurance products and services to commercial, public and quasi-public entities, and to professional and individual customers; the National Programs Segment, which acts as a managing general agent, provides professional liability and related package products; the Wholesale Brokerage Segment, which markets and sells excess and surplus commercial and personal lines insurance, and the Services Segment, which provides insurance-related services, including third-party claims administration and medical utilization management services.

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