Critical Review: RenaissanceRe (NYSE:RNR) versus Skyward Specialty Insurance Group (NASDAQ:SKWD)

RenaissanceRe (NYSE:RNR) and Skyward Specialty Insurance Group (NASDAQ:SKWD) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, institutional ownership, risk, dividends, valuation and earnings.

Volatility & Risk

RenaissanceRe has a beta of 0.38, meaning that its stock price is 62% less volatile than the S&P 500. Comparatively, Skyward Specialty Insurance Group has a beta of 0.67, meaning that its stock price is 33% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and price targets for RenaissanceRe and Skyward Specialty Insurance Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RenaissanceRe	2	5	4	0	2.18
Skyward Specialty Insurance Group	0	3	7	1	2.82

RenaissanceRe presently has a consensus price target of $279.90, suggesting a potential upside of 18.23%. Skyward Specialty Insurance Group has a consensus price target of $56.25, suggesting a potential upside of 13.07%. Given RenaissanceRe’s higher probable upside, analysts plainly believe RenaissanceRe is more favorable than Skyward Specialty Insurance Group.

Valuation & Earnings

This table compares RenaissanceRe and Skyward Specialty Insurance Group”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RenaissanceRe	$11.65 billion	1.00	$1.87 billion	$35.02	6.76
Skyward Specialty Insurance Group	$1.15 billion	1.74	$85.98 million	$2.89	17.21

RenaissanceRe has higher revenue and earnings than Skyward Specialty Insurance Group. RenaissanceRe is trading at a lower price-to-earnings ratio than Skyward Specialty Insurance Group, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

100.0% of RenaissanceRe shares are owned by institutional investors. Comparatively, 94.8% of Skyward Specialty Insurance Group shares are owned by institutional investors. 1.3% of RenaissanceRe shares are owned by company insiders. Comparatively, 8.0% of Skyward Specialty Insurance Group shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares RenaissanceRe and Skyward Specialty Insurance Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
RenaissanceRe	15.99%	23.41%	4.41%
Skyward Specialty Insurance Group	12.24%	16.39%	3.57%

Summary

RenaissanceRe beats Skyward Specialty Insurance Group on 8 of the 15 factors compared between the two stocks.

About RenaissanceRe

RenaissanceRe Holdings Ltd., together with its subsidiaries, provides reinsurance and insurance products in the United States and internationally. The company operates through Property, and Casualty and Specialty segments. The Property segment writes property catastrophe excess of loss reinsurance and excess of loss reinsurance to insure insurance and reinsurance companies against natural and man-made catastrophes, including hurricanes, earthquakes, typhoons, and tsunamis, as well as winter storms, freezes, floods, fires, windstorms, tornadoes, explosions, and acts of terrorism; and other property class of products, such as proportional reinsurance, property per risk, property reinsurance, binding facilities, and regional U.S. multi-line reinsurance. The Casualty and Specialty segment writes various classes of products, such as directors and officers, medical malpractice, and professional indemnity; automobile and employer’s liability, casualty clash, umbrella or excess casualty, workers’ compensation, and general liability; financial and mortgage guaranty, political risk, surety, and trade credit; and accident and health, agriculture, aviation, cyber, energy, marine, satellite, and terrorism. It distributes products and services primarily through intermediaries. The company invests in and manages funds. RenaissanceRe Holdings Ltd. was founded in 1993 and is headquartered in Pembroke, Bermuda.

About Skyward Specialty Insurance Group

Skyward Specialty Insurance Group, Inc., an insurance holding company, underwrites commercial property and casualty insurance products in the United States. It offers general liability, excess liability, professional liability, commercial auto, group accident and health, property, surety, and workers' compensation insurance products. Skyward Specialty Insurance Group, Inc. was incorporated in 2006 and is headquartered in Houston, Texas.