First Acceptance (OTCMKTS:FACO – Get Free Report) and First American Financial (NYSE:FAF – Get Free Report) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, risk, analyst recommendations, earnings, valuation, dividends and institutional ownership.

This is a summary of current ratings and target prices for First Acceptance and First American Financial, as reported by MarketBeat.com.

First American Financial has a consensus target price of $76.00, suggesting a potential upside of 19.47%. Given First American Financial’s stronger consensus rating and higher possible upside, analysts plainly believe First American Financial is more favorable than First Acceptance.

This table compares First Acceptance and First American Financial’s net margins, return on equity and return on assets.

0.1% of First Acceptance shares are held by institutional investors. Comparatively, 89.1% of First American Financial shares are held by institutional investors. 9.5% of First Acceptance shares are held by company insiders. Comparatively, 3.7% of First American Financial shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

First Acceptance has a beta of 0.08, suggesting that its share price is 92% less volatile than the S&P 500. Comparatively, First American Financial has a beta of 1.24, suggesting that its share price is 24% more volatile than the S&P 500.

This table compares First Acceptance and First American Financial”s revenue, earnings per share and valuation.

First American Financial has higher revenue and earnings than First Acceptance. First Acceptance is trading at a lower price-to-earnings ratio than First American Financial, indicating that it is currently the more affordable of the two stocks.

First American Financial beats First Acceptance on 11 of the 14 factors compared between the two stocks.

First Acceptance Corporation, together with its subsidiaries, operates as a retailer, servicer, and underwriter of non-standard personal automobile insurance and related products in the United States. It issues non-standard automobile insurance policies to individuals based on their inability or unwillingness to obtain insurance coverage from standard carriers due to various factors, including their payment preference, failure to maintain continuous insurance coverage, or driving record. The company also underwrites auto and motorcycle insurance products; and renters, homeowners, commercial, pet, life, travel, outdoor vehicle, and hospital indemnity insurance products. In addition, it provides TeleMed, a subscription service that offers access to doctor for consulting, diagnosing, and prescribing medication for non-emergency illness. The company primarily distributes its products through its retail locations, as well as through call center and internet. As of December 31, 2021, it leased and operated 338 retail locations, and a call center. First Acceptance Corporation was founded in 1969 and is headquartered in Nashville, Tennessee.