Critical Survey: Bowhead Specialty (NYSE:BOW) & Mercury General (NYSE:MCY)

Mercury General (NYSE:MCY) and Bowhead Specialty (NYSE:BOW) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, earnings, profitability, analyst recommendations, risk, institutional ownership and dividends.

Insider & Institutional Ownership

42.4% of Mercury General shares are held by institutional investors. 35.5% of Mercury General 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.

Profitability

This table compares Mercury General and Bowhead Specialty’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Mercury General	6.36%	14.91%	3.13%
Bowhead Specialty	N/A	N/A	N/A

Analyst Ratings

This is a breakdown of current ratings for Mercury General and Bowhead Specialty, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mercury General	0	0	0	0	N/A
Bowhead Specialty	0	3	2	0	2.40

Bowhead Specialty has a consensus price target of $29.40, suggesting a potential downside of 4.42%. Given Bowhead Specialty’s higher probable upside, analysts plainly believe Bowhead Specialty is more favorable than Mercury General.

Earnings and Valuation

This table compares Mercury General and Bowhead Specialty”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mercury General	$5.02 billion	0.75	$96.34 million	$3.89	17.42
Bowhead Specialty	$348.44 million	2.78	N/A	N/A	N/A

Mercury General has higher revenue and earnings than Bowhead Specialty.

Summary

Mercury General beats Bowhead Specialty on 6 of the 9 factors compared between the two stocks.

About Mercury General

Mercury General Corporation, together with its subsidiaries, engages in writing personal automobile insurance in the United States. The company also writes homeowners, commercial automobile, commercial property, mechanical protection, and umbrella insurance products. Its automobile insurance products include collision, property damage, bodily injury, comprehensive, personal injury protection, underinsured and uninsured motorist, and other hazards; and homeowners insurance products comprise dwelling, liability, personal property, and other coverages. The company sells its policies through a network of independent agents, insurance agencies, as well as directly through internet sales portals in Arizona, California, Florida, Georgia, Illinois, Nevada, New Jersey, New York, Oklahoma, Texas, and Virginia. Mercury General Corporation was founded in 1961 and is headquartered in Los Angeles, California.

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.