Allstate vs Root Which Is More Reliable?

Allstate Corporation and Root Inc. are two well-known insurance companies operating in the United States. Allstate, founded in 1931, is a traditional insurance company offering a wide range of insurance products and services, including auto, home, and life insurance. Root, on the other hand, is a newer player in the industry, specializing in personalized car insurance using telematics technology. Both companies have their unique strengths and weaknesses, making them interesting options for investors looking to capitalize on the insurance sector's growth potential.

Allstate or Root?

When comparing Allstate and Root, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Allstate and Root.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Allstate has a dividend yield of 1.38%, while Root has a dividend yield of -%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Allstate reports a 5-year dividend growth of 12.97% year and a payout ratio of 23.12%. On the other hand, Root reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Allstate P/E ratio at 11.30 and Root's P/E ratio at 75.37. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Allstate P/B ratio is 2.46 while Root's P/B ratio is 10.58.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Allstate has seen a 5-year revenue growth of 0.78%, while Root's is 2.79%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Allstate's ROE at 23.47% and Root's ROE at 14.04%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $196.93 for Allstate and $128.15 for Root. Over the past year, Allstate's prices ranged from $154.76 to $209.88, with a yearly change of 35.62%. Root's prices fluctuated between $34.04 and $145.34, with a yearly change of 326.97%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.