Critical Review: Fanhua (NASDAQ:FANH) and The Baldwin Insurance Group (NASDAQ:BWIN)

Fanhua (NASDAQ:FANH) and The Baldwin Insurance Group (NASDAQ:BWIN) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, valuation, dividends, institutional ownership, earnings, risk and analyst recommendations.

Profitability

This table compares Fanhua and The Baldwin Insurance Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Fanhua	8.67%	12.11%	6.89%
The Baldwin Insurance Group	-3.67%	10.46%	3.12%

Institutional & Insider Ownership

26.7% of Fanhua shares are owned by institutional investors. Comparatively, 70.4% of The Baldwin Insurance Group shares are owned by institutional investors. 25.6% of Fanhua shares are owned by insiders. Comparatively, 20.1% of The Baldwin Insurance Group shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Volatility and Risk

Fanhua has a beta of -0.07, suggesting that its share price is 107% less volatile than the S&P 500. Comparatively, The Baldwin Insurance Group has a beta of 1.59, suggesting that its share price is 59% more volatile than the S&P 500.

Earnings and Valuation

This table compares Fanhua and The Baldwin Insurance Group”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Fanhua	$3.20 billion	0.02	$39.50 million	$0.73	1.67
The Baldwin Insurance Group	$1.30 billion	4.13	-$90.14 million	($0.92)	-49.78

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

Analyst Ratings

This is a summary of current recommendations and price targets for Fanhua and The Baldwin Insurance Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fanhua	0	0	0	0	N/A
The Baldwin Insurance Group	0	1	3	1	3.00

The Baldwin Insurance Group has a consensus target price of $43.60, suggesting a potential downside of 4.80%. Given The Baldwin Insurance Group’s higher probable upside, analysts plainly believe The Baldwin Insurance Group is more favorable than Fanhua.

Summary

Fanhua beats The Baldwin Insurance Group on 8 of the 14 factors compared between the two stocks.

About Fanhua

Fanhua Inc., together with its subsidiary, distributes insurance products in China. It operates through two segments, Insurance Agency and Claims Adjusting. The Insurance Agency segment provides property and casualty insurance products that primarily include individual accident, travel, homeowner, and indemnity medical insurance products; and life insurance products, such as individual health, individual whole life, individual term life, individual endowment life, and individual annuity, as well as participating insurance products. The Claims Adjusting segment offers pre-underwriting survey, claims adjusting, residual value disposal, loading and unloading supervision, and consulting services. The company also operates baoxian.com, an online insurance distribution platform; Lan Zhanggui, an all-in-one insurance sales and service platform; ehuzhu.com, an online mutual aid platform, as well as Fanhua RONS DOP, a digital marketing platform; Fanhua RONS Guanjia, a customer service platform; and Fanhua WeCom that enables agents to directly interact with existing and potential customers. It serves customers through insurance sales and service group, and insurance agencies, as well as sales and service branches and outlets, registered independent sales agents, and in-house claims adjustors. The company was formerly known as CNinsure Inc. and changed its name to Fanhua Inc. in December 2016. Fanhua Inc. was founded in 1998 and is headquartered in Guangzhou, China. As of December 29, 2023, Fanhua Inc. operates as a subsidiary of Puyi Inc..

About The Baldwin Insurance Group

The Baldwin Insurance Group, Inc. operates as an independent insurance distribution firm that delivers insurance and risk management solutions in the United States. It operates through three segments: Insurance Advisory Solutions; Underwriting, Capacity & Technology Solutions; and Mainstreet Insurance Solutions. The Insurance Advisory Solutions segment provides commercial risk management, employee benefits, and private risk management solutions for businesses and high-net-worth individuals, as well as their families. The Underwriting, Capacity & Technology Solutions segment offers Future platform, that manufactures technology-enabled insurance products suite comprises personal, commercial, and specialty lines; specialty wholesale broker business that delivers professionals, individuals, and niche industry businesses; and reinsurance brokerage services. The Mainstreet Insurance Solutions segment provides personal insurance, commercial insurance, and life and health solutions to individuals and businesses in communities. The company was formerly known as BRP Group, Inc. and changed its name to The Baldwin Insurance Group, Inc. in May 2024. The Baldwin Insurance Group, Inc. was founded in 2011 and is headquartered in Tampa, Florida.