Contrasting Berkshire Hathaway (BRK.B) & Atlas Financial Holdings (AFH)

Berkshire Hathaway (NYSE: BRK.B) and Atlas Financial Holdings (NASDAQ:AFH) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, profitability, risk, analyst recommendations, dividends, valuation and institutional ownership.

Analyst Ratings

This is a breakdown of current ratings and target prices for Berkshire Hathaway and Atlas Financial Holdings, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Berkshire Hathaway 1 1 2 0 2.25
Atlas Financial Holdings 0 0 3 0 3.00

Berkshire Hathaway currently has a consensus price target of $207.50, suggesting a potential upside of Infinity. Atlas Financial Holdings has a consensus price target of $18.50, suggesting a potential downside of 2.37%. Given Berkshire Hathaway’s higher possible upside, equities research analysts clearly believe Berkshire Hathaway is more favorable than Atlas Financial Holdings.

Profitability

This table compares Berkshire Hathaway and Atlas Financial Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Berkshire Hathaway 9.08% 5.83% 2.66%
Atlas Financial Holdings 1.67% -3.32% -1.03%

Institutional & Insider Ownership

35.3% of Berkshire Hathaway shares are owned by institutional investors. Comparatively, 79.1% of Atlas Financial Holdings shares are owned by institutional investors. 6.1% of Berkshire Hathaway shares are owned by insiders. Comparatively, 12.7% of Atlas Financial Holdings shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Risk and Volatility

Berkshire Hathaway has a beta of 0.88, meaning that its stock price is 12% less volatile than the S&P 500. Comparatively, Atlas Financial Holdings has a beta of 0.87, meaning that its stock price is 13% less volatile than the S&P 500.

Valuation & Earnings

This table compares Berkshire Hathaway and Atlas Financial Holdings’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Berkshire Hathaway N/A N/A N/A $8.85 N/A
Atlas Financial Holdings $197.16 million 1.16 -$1.70 million $0.23 82.39

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

Summary

Berkshire Hathaway beats Atlas Financial Holdings on 6 of the 11 factors compared between the two stocks.

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.

Atlas Financial Holdings Company Profile

Atlas Financial Holdings Inc formerly JJR VI Acquisition Corp is a Canada-based company. It is engaged in the business of providing commercial automobile insurance in the United States with a niche market orientation. The Company’s automobile insurance products provide coverage in three areas: liability, accident benefits and physical damage. Liability insurance provides coverage where the insured is responsible for an automobile accident, for the payment for injuries and property damage to third parties. Accident benefit policies or personal injury protection policies provide coverage for loss of income, medical and rehabilitation expenses for insured persons who are injured in an automobile accident, Physical damage coverages provide for the payment of damages to an insured automobile arising from a collision with another object or from other risks. In January 2013, the Company acquired Camelot Services Inc. and its insurance subsidiary, Gateway Insurance Company.




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