Critical Review: The Navigators Group (NAVG) vs. Berkshire Hathaway (BRK.B)

The Navigators Group (NASDAQ: NAVG) and Berkshire Hathaway (NYSE:BRK.B) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, risk, dividends, valuation, earnings, analyst recommendations and profitability.

Dividends

The Navigators Group pays an annual dividend of $0.24 per share and has a dividend yield of 0.4%. Berkshire Hathaway does not pay a dividend. The Navigators Group pays out 8.5% of its earnings in the form of a dividend.

Valuation & Earnings

This table compares The Navigators Group and Berkshire Hathaway’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
The Navigators Group $1.24 billion 1.38 $135.66 million $2.83 20.49
Berkshire Hathaway N/A N/A N/A $8.85 N/A

The Navigators Group has higher revenue and earnings than Berkshire Hathaway. Berkshire Hathaway is trading at a lower price-to-earnings ratio than The Navigators Group, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares The Navigators Group and Berkshire Hathaway’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
The Navigators Group 6.86% 6.53% 1.60%
Berkshire Hathaway 9.08% 5.83% 2.66%

Institutional and Insider Ownership

73.3% of The Navigators Group shares are held by institutional investors. Comparatively, 35.4% of Berkshire Hathaway shares are held by institutional investors. 24.1% of The Navigators Group shares are held by company insiders. Comparatively, 6.1% of Berkshire Hathaway shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Risk & Volatility

The Navigators Group has a beta of 0.79, meaning that its share price is 21% less volatile than the S&P 500. Comparatively, Berkshire Hathaway has a beta of 0.87, meaning that its share price is 13% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations for The Navigators Group and Berkshire Hathaway, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
The Navigators Group 0 5 0 0 2.00
Berkshire Hathaway 1 1 2 0 2.25

The Navigators Group presently has a consensus target price of $57.00, suggesting a potential downside of 1.72%. Berkshire Hathaway has a consensus target price of $207.50, suggesting a potential upside of Infinity. Given Berkshire Hathaway’s stronger consensus rating and higher probable upside, analysts clearly believe Berkshire Hathaway is more favorable than The Navigators Group.

Summary

Berkshire Hathaway beats The Navigators Group on 9 of the 14 factors compared between the two stocks.

The Navigators Group Company Profile

The Navigators Group, Inc. is an insurance holding company. The Company is an international insurance company focused on marine insurance. The Company’s segments include U.S. Insurance, International Insurance (Int’l Insurance), Global Reinsurance (GlobalRe) and Corporate. The Company’s Property and Casualty (P&C) insurance business primarily offers general liability coverage, and umbrella and excess liability coverage to commercial enterprises through its U.S. Insurance and Int’l Insurance segments. It also offers reinsurance products through its GlobalRe segment. It distributes its products through international, national and regional, retail and wholesale insurance brokers. The Company’s U.S. Insurance and Int’l Insurance segments consists of three segments, such as Marine, Property and Casualty (P&C) and Professional Liability. Its GlobalRe products include accident & health (A&H), marine, P&C and professional liability.

Berkshire Hathaway Company Profile

Berkshire Hathaway Inc. is a holding company owning subsidiaries engaged in various business activities. Its segments include Insurance, such as GEICO, Berkshire Hathaway Primary Group, General Re Corporation and Berkshire Hathaway Reinsurance Group; Burlington Northern Santa Fe, LLC, which is engaged in the operation of the railroad system; Berkshire Hathaway Energy, which includes regulated electric and gas utility; Manufacturing, which includes manufacturers of various products, including industrial, consumer and building products; McLane Company, which is engaged in the wholesale distribution of groceries and non-food items; Service and retailing, which includes providers of various services, including fractional aircraft ownership programs, aviation pilot training and various retailing businesses, and Finance and financial products, which includes manufactured housing and related consumer financing, transportation equipment, manufacturing and leasing, and furniture leasing.

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