Fairfax Financial (OTCMKTS:FRFHF) vs. Skyward Specialty Insurance Group (NASDAQ:SKWD) Financial Survey

Fairfax Financial (OTCMKTS:FRFHF) and Skyward Specialty Insurance Group (NASDAQ:SKWD) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, valuation, institutional ownership, risk, profitability, earnings and analyst recommendations.

Profitability

This table compares Fairfax Financial and Skyward Specialty Insurance Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Fairfax Financial	12.47%	14.43%	4.09%
Skyward Specialty Insurance Group	12.24%	16.39%	3.57%

Institutional & Insider Ownership

10.4% of Fairfax Financial shares are held by institutional investors. Comparatively, 94.8% of Skyward Specialty Insurance Group shares are held by institutional investors. 8.0% of Skyward Specialty Insurance Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations for Fairfax Financial and Skyward Specialty Insurance Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fairfax Financial	0	0	3	0	3.00
Skyward Specialty Insurance Group	0	4	7	1	2.75

Fairfax Financial presently has a consensus target price of $1,500.00, indicating a potential downside of 4.84%. Skyward Specialty Insurance Group has a consensus target price of $61.13, indicating a potential upside of 2.08%. Given Skyward Specialty Insurance Group’s higher possible upside, analysts clearly believe Skyward Specialty Insurance Group is more favorable than Fairfax Financial.

Earnings and Valuation

This table compares Fairfax Financial and Skyward Specialty Insurance Group”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Fairfax Financial	$31.06 billion	1.15	$3.87 billion	$172.92	9.12
Skyward Specialty Insurance Group	$1.21 billion	1.99	$85.98 million	$3.00	19.96

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

Risk and Volatility

Fairfax Financial has a beta of 0.76, indicating that its share price is 24% less volatile than the S&P 500. Comparatively, Skyward Specialty Insurance Group has a beta of 0.64, indicating that its share price is 36% less volatile than the S&P 500.

Summary

Skyward Specialty Insurance Group beats Fairfax Financial on 8 of the 15 factors compared between the two stocks.

About Fairfax Financial

Fairfax Financial Holdings Limited, through its subsidiaries, provides property and casualty insurance and reinsurance, and investment management services in the United States, Canada, Asia, and internationally. The company operates through Property and Casualty Insurance and Reinsurance, Life insurance and Run-off, and Non-Insurance Companies segments. It insures against losses to property from fire, explosion, earthquake, windstorm, flood, terrorism, boiler explosion, machinery breakdown, and construction defects, as well as underwrites automobile, commercial and personal property, and crop insurance. The company also offers workers' compensation, automobile, employer's liability, accident and health, medical malpractice, professional liability, and umbrella coverage insurance products; marine, aerospace, surety risk, and other risks and liabilities insurance products; and reinsurance products. In addition, it franchises, owns, and operates restaurants; retails sports lifestyle products; provides integrated travel and travel-related financial services, as well as advanced digital tools for agriculture; owns and operates holiday resorts; originates, processes, and distributes value-added pulses and staple foods; develops, manages, and invests in hospitality real estate. The company was formerly known as Markel Financial Holdings Limited and changed its name to Fairfax Financial Holdings Limited in 1987. Fairfax Financial Holdings Limited was incorporated in 1951 and is headquartered in Toronto, Canada.

About Skyward Specialty Insurance Group

Skyward Specialty Insurance Group, Inc., an insurance holding company, underwrites commercial property and casualty insurance products in the United States. It offers general liability, excess liability, professional liability, commercial auto, group accident and health, property, surety, and workers' compensation insurance products. Skyward Specialty Insurance Group, Inc. was incorporated in 2006 and is headquartered in Houston, Texas.