Financial Review: Hallmark Financial Services (NASDAQ:HALL) versus MediaAlpha (NYSE:MAX)

Hallmark Financial Services (NASDAQ:HALLGet Rating) and MediaAlpha (NYSE:MAXGet Rating) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, valuation, dividends, risk, profitability and earnings.

Volatility and Risk

Hallmark Financial Services has a beta of 1.24, indicating that its share price is 24% more volatile than the S&P 500. Comparatively, MediaAlpha has a beta of 0.67, indicating that its share price is 33% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for Hallmark Financial Services and MediaAlpha, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hallmark Financial Services 0 0 0 0 N/A
MediaAlpha 0 3 1 0 2.25

Hallmark Financial Services presently has a consensus price target of $6.00, indicating a potential upside of 142.91%. MediaAlpha has a consensus price target of $18.60, indicating a potential upside of 85.44%. Given Hallmark Financial Services’ higher probable upside, equities research analysts clearly believe Hallmark Financial Services is more favorable than MediaAlpha.

Valuation & Earnings

This table compares Hallmark Financial Services and MediaAlpha’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hallmark Financial Services $404.70 million 0.11 $9.00 million ($0.16) -15.44
MediaAlpha $645.27 million 0.95 -$5.28 million ($0.38) -26.39

Hallmark Financial Services has higher earnings, but lower revenue than MediaAlpha. MediaAlpha is trading at a lower price-to-earnings ratio than Hallmark Financial Services, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Hallmark Financial Services and MediaAlpha’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hallmark Financial Services -0.74% -3.62% -0.42%
MediaAlpha -2.06% N/A -3.97%

Insider and Institutional Ownership

19.1% of Hallmark Financial Services shares are held by institutional investors. Comparatively, 65.5% of MediaAlpha shares are held by institutional investors. 28.7% of Hallmark Financial Services shares are held by company insiders. Comparatively, 9.6% of MediaAlpha shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Hallmark Financial Services beats MediaAlpha on 8 of the 13 factors compared between the two stocks.

Hallmark Financial Services Company Profile (Get Rating)

Hallmark Financial Services, Inc. underwrites, markets, distributes, and services property/casualty insurance products to businesses and individuals in the United States. The company operates through Specialty Commercial, Standard Commercial, and Personal segments. The Specialty Commercial segment offers primary and excess commercial vehicle insurance products and services; primary and excess liability, excess public entity liability, and E&S package and garage liability insurance products and services; primary and excess commercial property insurance for catastrophe and non-catastrophe exposures; healthcare and financial lines professional liability insurance products and services primarily for businesses, medical professionals, medical facilities, and senior care facilities; and satellite launch property/casualty insurance products and services, as well as various specialty programs. The Standard Commercial segment provides package and monoline property/casualty insurance products and services. The Personal segment offers non-standard personal automobile and renters insurance products and services. It markets its insurance products through independent general agents, retail agents, and specialty brokers. The company was incorporated in 1987 and is headquartered in Dallas, Texas.

MediaAlpha Company Profile (Get Rating)

MediaAlpha, Inc., through its subsidiaries, operates an insurance customer acquisition platform in the United States. It optimizes customer acquisition in various verticals of property and casualty insurance, health insurance, and life insurance. The company was founded in 2014 and is headquartered in Los Angeles, California. MediaAlpha, Inc. is a subsidiary of White Mountains Insurance Group, Ltd.

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