Root vs. MS&AD Insurance Group Holdings: Which Insurance Stock is a Better Choice?

: ROOT | Root Inc. Cl A News, Ratings, and Charts

ROOT – While insurance companies may not be as sexy as tech stocks, they can still be good investments. People are always buying insurance, which provides steady income for these companies. Root (ROOT) and MS&AD Insurance Group Holdings (MSADY) are two lesser known insurance stocks, but which is the better buy? Read more to find out.

Insurance stocks lack the intrigue and excitement of high-flying tech stocks, yet some companies operating in the insurance space are highly investable. Insurance providers will always attract investors to a certain extent simply because these businesses have a dependable source of revenue that is always in demand. Some industry innovators within the space are evolving and disrupting the competition with highly idiosyncratic business models.

Instead of investing in the top insurance companies that advertise on TV and radio, expand your search to some of the industry’s lesser-known players. Continue researching this segment, and you will find more than a couple of insurance companies with considerable merit.

Root (ROOT) and MS&AD Insurance Group Holdings (MSADY) are two publicly traded insurance companies most retail investors aren’t aware of, mainly because the mainstream investing media shies away from the comparably boring insurance space. Below, I provide a closer look at these insurance providers.

Root (ROOT)

ROOT is a tech business that has disrupted the personal insurance segment with a unique pricing model. Headquartered in Columbus, Ohio, ROOT went public nearly one year ago, debuting at around $23. The stock now trades at less than one-third of this initial price. Take a close look at ROOT’s earnings reports, and you will find the losses are quickly mounting. However, ROOT’s quest to remove credit scores from insurance coverage pricing using artificial intelligence and data is certainly commendable.

ROOT is a POWR Ratings dud with an overall grade of F, which translates into a Strong Sell rating. ROOT has a grade of F in the Sentiment, Value, and Stability components a D in the Growth component. Investors can find out how ROOT grades in the Quality and Momentum components by clicking here.

Of the 57 stocks in the Insurance – Property & Casualty industry, ROOT is ranked second to last, slotting in at 56th. Click here to find the top stocks in this industry.

The average analyst price target for ROOT is $9.46. If the stock reaches this price point, it will have popped by more than 48%. However, I would be remiss if I didn’t highlight the analysts’ average target price for the stock has declined by $14.27 in the past 38 weeks. 

MS&AD Insurance Group Holdings (MSADY)

MSADY provides life insurance along with overseas insurance and additional forms of insurance. The company writes policies ranging from marine to auto, casualty, fire, and beyond. Headquartered in Tokyo, Japan, MSADY has a forward P/E ratio of 7.47. This low ratio indicates that the stock is very undervalued.

MSADY is trading three cents below its 52-week high of $17.02, while its low is $13.17. MSADY has a beta of 0.52, which means it is half as volatile as the market. It is also worth noting MSADY pays a dividend of 3.05%.

MSADY has an overall grade of B, translating into a Buy rating in our POWR Ratings system. The stock has grades of B in the Value, Sentiment, and Stability components. Click here to find out how MSADY grades in the rest of the components, including Momentum, Quality, and Growth.

Out of the 57 stocks in the Insurance – Property & Casualty industry, MSADY cracks the top 10, coming in at number eight. 

Which Insurance Stock is Better?

MSADY is clearly superior to ROOT. Aside from having a top-10 industry rank, MSADY has a better overall POWR Rating. Plus, its highly graded component grades also bode well.


ROOT shares fell $0.03 (-0.48%) in after-hours trading Thursday. Year-to-date, ROOT has declined -60.28%, versus a 22.01% rise in the benchmark S&P 500 index during the same period.


About the Author: Patrick Ryan


Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
ROOTGet RatingGet RatingGet Rating
MSADYGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


:  |  News, Ratings, and Charts

2022 Stock Market Outlook

The stock market (SPY) has continued on a bullish path in 2021. Will that continue in 2022? And what could happen to awaken the bear market from hibernation? 40 year investment veteran Steve Reitmeister explores this and more in this early edition of his 2022 Stock Market Outlook. Read on for full details below...

:  |  News, Ratings, and Charts

How Recent Bearish Sentiment Will Impact the Stock Market

Last week, the S&P 500 (SPY) fell during a short trading week. Multiple factors were weighing on investor sentiment. First was September's history for being a weaker month for stock performance. In addition, the previous week's August payrolls miss seemed to linger on investors' minds due to concerns that the delta variant of COVID was slowing the rebound in the economy. The real estate sector led declines as long-term interest rates increased. Consumer staples and utility stocks performed the best. In terms of market cap, the small-cap Russell 2000 Index underperformed the market after two strong weeks of outperforming the larger benchmarks. Growth stocks also outperformed Value stocks. I’ll discuss this and more below…

:  |  News, Ratings, and Charts

How to Turn Low Priced Stocks into BIG Winners?

Some investors are into growth stocks...some prefer value stocks while others are into momentum, income, chart patterns, insider trading and more. But one area that most investors agree upon is the great appeal in buying low priced stocks. Like those under $10 given the potential that prices soar and you easily beat the stock market (SPY). Read on to discover our brand new strategy for selecting low priced stocks that has led to a surprising +62.88% average annual return. Get the rest below...

:  |  News, Ratings, and Charts

3 Growth Stocks You Can Buy at a Reasonable Price

Even with growth stocks falling last week, investors are still pouring money into companies with strong growth potential. When you add in a value component, you get the best of both worlds. That's why investors should consider growth at a reasonable price stocks such as Westlake Chemical Corporation (WLK), ManpowerGroup (MAN), AutoNation, Inc. (AN).

:  |  News, Ratings, and Charts

How to Turn Low Priced Stocks into BIG Winners?

Some investors are into growth stocks...some prefer value stocks while others are into momentum, income, chart patterns, insider trading and more. But one area that most investors agree upon is the great appeal in buying low priced stocks. Like those under $10 given the potential that prices soar and you easily beat the stock market (SPY). Read on to discover our brand new strategy for selecting low priced stocks that has led to a surprising +62.88% average annual return. Get the rest below...

Read More Stories

More Root Inc. Cl A (ROOT) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All ROOT News