Allstate (NYSE:ALL) & Root (NASDAQ:ROOT) Head-To-Head Analysis

Root (NASDAQ:ROOT) and Allstate (NYSE:ALL) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, earnings, valuation, dividends, institutional ownership, profitability and risk.

Profitability

This table compares Root and Allstate’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Root	-17.61%	-62.36%	-8.64%
Allstate	2.31%	14.44%	2.04%

Volatility and Risk

Root has a beta of 2.57, indicating that its share price is 157% more volatile than the S&P 500. Comparatively, Allstate has a beta of 0.48, indicating that its share price is 52% less volatile than the S&P 500.

Earnings & Valuation

This table compares Root and Allstate’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Root	$455.00 million	2.36	-$147.40 million	($7.77)	-9.28
Allstate	$57.09 billion	0.80	-$188.00 million	$4.53	38.24

Root has higher earnings, but lower revenue than Allstate. Root is trading at a lower price-to-earnings ratio than Allstate, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings and price targets for Root and Allstate, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Root	0	5	4	0	2.44
Allstate	1	2	12	1	2.81

Root presently has a consensus price target of $41.89, suggesting a potential downside of 41.56%. Allstate has a consensus price target of $178.06, suggesting a potential upside of 2.52%. Given Allstate’s stronger consensus rating and higher possible upside, analysts clearly believe Allstate is more favorable than Root.

Institutional and Insider Ownership

59.8% of Root shares are held by institutional investors. Comparatively, 76.5% of Allstate shares are held by institutional investors. 11.7% of Root shares are held by insiders. Comparatively, 1.8% of Allstate shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

Allstate beats Root on 11 of the 15 factors compared between the two stocks.

About Root

Root, Inc. provides insurance products and services in the United States. The company offers automobile, homeowners, and renters insurance products. It operates a direct-to-consumer model; and serves customers primarily through mobile applications, as well as through its website. The company's direct distribution channels also cover digital, media, and referral channels, as well as distribution partners and agencies. Root, Inc. was incorporated in 2015 and is headquartered in Columbus, Ohio.

About Allstate

The Allstate Corporation, together with its subsidiaries, provides property and casualty, and other insurance products in the United States and Canada. It operates in five segments: Allstate Protection; Protection Services; Allstate Health and Benefits; Run-off Property-Liability; and Corporate and Other segments. The Allstate Protection segment offers private passenger auto and homeowners insurance; other personal lines products; and commercial lines products through agents, contact centers, and online. The Protection Services segment provides consumer product protection; protection and insurance products, including vehicle service contracts, guaranteed asset protection, road hazard tire and wheel, and paintless dent repair protection; and roadside assistance, device and mobile data collection services, and analytic solutions using automotive telematics information, as well as identity theft protection and remediation services. This segment also offers its products under various brands, including Allstate Protection Plans, Allstate Dealer Services, Allstate Roadside, Arity, Avail, and Allstate Identity Protection. The Allstate Health and Benefits segment provides life, accident, critical illness, short-term disability, and other health insurance products; stop-loss and fully insured group health products to employers; and short-term medical and medicare supplement insurance to individuals. The Run-off Property-Liability segment offers property and casualty insurance coverage that primarily relates to policies written during the 1960s through the mid-1980s. The Corporate and Other segment provides debt services, as well as non-insurance operations. It sells its products through agents, independent agents, call and contact centers, retailers, direct to consumer, wholesale partners, and affinity groups, as well as through online and mobile applications. The Allstate Corporation was founded in 1931 and is headquartered in Northbrook, Illinois.