Head to Head Review: TWFG (NASDAQ:TWFG) & Waterdrop (NYSE:WDH)

Waterdrop (NYSE:WDH) and TWFG (NASDAQ:TWFG) are both small-cap business services companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, dividends, earnings, profitability, risk and institutional ownership.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Waterdrop and TWFG, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Waterdrop	0	0	0	0	0.00
TWFG	0	3	6	0	2.67

TWFG has a consensus target price of $30.43, indicating a potential downside of 13.90%. Given TWFG’s stronger consensus rating and higher probable upside, analysts plainly believe TWFG is more favorable than Waterdrop.

Profitability

This table compares Waterdrop and TWFG’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Waterdrop	9.71%	5.67%	4.28%
TWFG	N/A	N/A	N/A

Valuation and Earnings

This table compares Waterdrop and TWFG”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Waterdrop	$2.73 billion	0.15	$23.06 million	$0.09	12.22
TWFG	$185.45 million	2.82	$26.10 million	N/A	N/A

TWFG has lower revenue, but higher earnings than Waterdrop.

Insider and Institutional Ownership

2.0% of Waterdrop shares are held by institutional investors. 24.6% of Waterdrop shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

Waterdrop beats TWFG on 6 of the 11 factors compared between the two stocks.

About Waterdrop

Waterdrop Inc., through its subsidiaries, provides online insurance brokerage services to match and connect users with related insurance products underwritten by insurance companies in the People's Republic of China. The company offers short-term health and long-term health and life insurance products and services. It also operates a medical crowdfunding platform. Waterdrop Inc. was founded in 2016 and is headquartered in Beijing, the People's Republic of China.

About TWFG

TWFG, Inc. operates an independent distribution platform for personal and commercial insurance products in the United States. Its personal and commercial insurance products include auto, home, renters, life, health, motorcycle, umbrella, boat, recreational vehicle, flood, wind, event, luxury item, general liability, property, business auto, workers’ compensation, business owner policy, and professional liability insurance products, as well as commercial bonds and group benefits. The company was founded in 2001 and is based in The Woodlands, Texas. TWFG, Inc. operates as a subsidiary of Bunch Family Holdings, LLC.