Critical Review: Berkshire Hathaway (BRK-A) & ProAssurance Corporation (PRA)

Berkshire Hathaway (NASDAQ: BRK-A) and ProAssurance Corporation (NYSE:PRA) are both mid-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, dividends, risk, earnings, profitability and valuation.

Profitability

This table compares Berkshire Hathaway and ProAssurance Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Berkshire Hathaway N/A N/A N/A
ProAssurance Corporation 16.80% 6.59% 2.50%

Analyst Ratings

This is a summary of recent ratings and price targets for Berkshire Hathaway and ProAssurance Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Berkshire Hathaway 0 1 2 0 2.67
ProAssurance Corporation 0 4 0 0 2.00

Berkshire Hathaway currently has a consensus target price of $279,666.67, suggesting a potential downside of 0.47%. ProAssurance Corporation has a consensus target price of $58.33, suggesting a potential upside of 5.20%. Given ProAssurance Corporation’s higher possible upside, analysts clearly believe ProAssurance Corporation is more favorable than Berkshire Hathaway.

Valuation & Earnings

This table compares Berkshire Hathaway and ProAssurance Corporation’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Berkshire Hathaway $232.80 billion 1.98 $43.46 billion N/A N/A
ProAssurance Corporation $890.60 million 3.33 $212.38 million $2.78 19.95

Berkshire Hathaway has higher revenue and earnings than ProAssurance Corporation.

Insider & Institutional Ownership

79.8% of ProAssurance Corporation shares are owned by institutional investors. 1.8% of ProAssurance Corporation shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Dividends

ProAssurance Corporation pays an annual dividend of $1.24 per share and has a dividend yield of 2.2%. Berkshire Hathaway does not pay a dividend. ProAssurance Corporation pays out 44.6% of its earnings in the form of a dividend.

Summary

ProAssurance Corporation beats Berkshire Hathaway on 8 of the 14 factors compared between the two stocks.

Berkshire Hathaway Company Profile

Berkshire Hathaway Inc. operates as a holding company. It provides property and casualty insurance and reinsurance, as well as life, accident, and health reinsurance; and operates railroad systems in North America. The company also generates, transmits, and distributes electricity primarily from solar, wind, nuclear, geothermal, and hydro sources; operates natural gas distribution and storage facilities, interstate pipelines, and compressor and meter stations; and holds interest in coal mining assets. In addition, it offers real estate brokerage services; invests in fixed-income and equity instruments; and engages in manufactured housing and finance business, leasing of transportation equipment, and furniture leasing activities. Further, the company manufactures boxed chocolates and other confectionery products; specialty chemicals, metal cutting tools, and other products; flooring, insulation, roofing and engineered, building and engineered components, paints and coatings, and bricks and masonry products; recreational vehicles, apparel products, jewelry, and custom picture framing products; and alkaline batteries. Additionally, it manufactures structural investment castings and forged components, machined airframe components, and engineered critical fasteners; airfoil castings; titanium and nickel superalloy melted and mill products; and seamless pipes, fittings, and forgings. The company distributes newspapers, televisions, and information; franchises and services quick service restaurants; distributes electronic components; and offers steel and logistics services, professional aviation training programs, and fractional aircraft ownership programs. In addition, it retails automobiles; furniture, bedding, and accessories; household appliances, electronics, and computers; jewelry, watches, crystal, china, stemware, flatware, gifts, and collectibles; kitchenware; and motorcycle accessories. The company was founded in 1889 and is headquartered in Omaha, Nebraska.

ProAssurance Corporation Company Profile

ProAssurance Corporation (ProAssurance) is a holding company for property and casualty insurance companies. The Company provides professional liability insurance for healthcare professionals and facilities, professional liability insurance for attorneys, liability insurance for medical technology and life sciences risks, and workers’ compensation insurance. The Company operates through four segments. The Specialty property and casualty segment includes the Company’s professional liability business, and medical technology and life sciences business. The Workers’ compensation segment includes its workers’ compensation business. Lloyd’s Syndicate 1729 (Syndicate 1729) segment includes business of Syndicate 1729, which underwrites risks over a range of property and casualty insurance and reinsurance lines. The Corporate segment includes the Company’s investment operations managed at the corporate level and non-premium revenues generated outside of its insurance entities.

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