Analyzing United Fire Group (NASDAQ:UFCS) & Bowhead Specialty (NYSE:BOW)

United Fire Group (NASDAQ:UFCS) and Bowhead Specialty (NYSE:BOW) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, earnings, risk, analyst recommendations, valuation and dividends.

Institutional and Insider Ownership

62.7% of United Fire Group shares are held by institutional investors. 6.0% of United Fire Group shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares United Fire Group and Bowhead Specialty’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
United Fire Group	4.15%	6.75%	1.51%
Bowhead Specialty	N/A	N/A	N/A

Analyst Recommendations

This is a summary of current recommendations and price targets for United Fire Group and Bowhead Specialty, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
United Fire Group	0	1	0	0	2.00
Bowhead Specialty	0	3	2	0	2.40

United Fire Group presently has a consensus price target of $26.00, suggesting a potential downside of 14.30%. Bowhead Specialty has a consensus price target of $31.40, suggesting a potential downside of 13.67%. Given Bowhead Specialty’s stronger consensus rating and higher possible upside, analysts plainly believe Bowhead Specialty is more favorable than United Fire Group.

Valuation and Earnings

This table compares United Fire Group and Bowhead Specialty”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
United Fire Group	$1.21 billion	0.64	-$29.70 million	$1.94	15.64
Bowhead Specialty	N/A	N/A	N/A	N/A	N/A

Bowhead Specialty has lower revenue, but higher earnings than United Fire Group.

Summary

United Fire Group beats Bowhead Specialty on 6 of the 9 factors compared between the two stocks.

About United Fire Group

United Fire Group, Inc., together with its subsidiaries, provides property and casualty insurance for individuals and businesses in the United States. The company offers commercial and personal lines of property and casualty insurance; and reinsurance coverage for property and casualty insurance. Its commercial lines include fire and allied lines, other liability, automobile, workers’ compensation, fidelity and surety coverage, and other insurance products; and personal lines comprise automobile, and fire and allied lines coverage, including homeowners, as well as provides assumed reinsurance products. The company sells its products through a network of independent agencies. United Fire Group, Inc. was incorporated in 1946 and is headquartered in Cedar Rapids, Iowa.

About Bowhead Specialty

Bowhead Specialty Holdings Inc. provides specialty property and casualty insurance products in the United States. It underwrites casualty insurance solutions for risks in the construction, distribution, heavy manufacturing, real estate, and hospitality segments; professional liability insurance solutions for financial institutions, private and public directors and officers liability insurance, errors and omissions liability insurance, and cyber segments; and healthcare solutions for hospitals, senior care providers, managed care organizations, miscellaneous medical facilities, and healthcare management liability segments. The company distributes its products through distribution partners in wholesale and retail markets. Bowhead Specialty Holdings Inc. was formerly known as Bowhead Holdings Inc. and changed its name to Bowhead Specialty Holdings Inc. in March 2024. The company was founded in 2020 and is based in New York, New York. Bowhead Specialty Holdings Inc. operates as a subsidiary of Bowhead Insurance Holdings LP.