Head to Head Analysis: Palomar (NASDAQ:PLMR) & Stewart Information Services (NYSE:STC)

Palomar (NASDAQ:PLMR) and Stewart Information Services (NYSE:STC) are both mid-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, valuation, dividends, risk, profitability, analyst recommendations and institutional ownership.

Institutional and Insider Ownership

90.2% of Palomar shares are held by institutional investors. Comparatively, 96.9% of Stewart Information Services shares are held by institutional investors. 3.7% of Palomar shares are held by insiders. Comparatively, 2.9% of Stewart Information Services shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations and price targets for Palomar and Stewart Information Services, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Palomar	0	2	4	0	2.67
Stewart Information Services	0	1	4	0	2.80

Palomar currently has a consensus price target of $158.25, indicating a potential upside of 17.89%. Stewart Information Services has a consensus price target of $81.67, indicating a potential upside of 13.17%. Given Palomar’s higher possible upside, equities analysts clearly believe Palomar is more favorable than Stewart Information Services.

Volatility & Risk

Palomar has a beta of 0.41, indicating that its stock price is 59% less volatile than the S&P 500. Comparatively, Stewart Information Services has a beta of 0.99, indicating that its stock price is 1% less volatile than the S&P 500.

Profitability

This table compares Palomar and Stewart Information Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Palomar	20.11%	22.62%	6.60%
Stewart Information Services	4.19%	10.07%	5.17%

Valuation and Earnings

This table compares Palomar and Stewart Information Services”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Palomar	$875.97 million	4.06	$197.07 million	$7.18	18.69
Stewart Information Services	$3.09 billion	0.71	$115.54 million	$4.48	16.11

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

Summary

Palomar beats Stewart Information Services on 9 of the 13 factors compared between the two stocks.

About Palomar

Palomar Holdings, Inc., a specialty insurance company, provides property and casualty insurance to residential and businesses in the United States. The company offers personal and commercial specialty property insurance products, including residential and commercial earthquake, fronting, commercial all risk, specialty homeowners, inland marine, Hawaii hurricane, and residential flood, as well as other products, such as assumed reinsurance. It markets and distributes its products through retail agents, wholesale brokers, program administrators, and carrier partnerships. The company was formerly known as GC Palomar Holdings and changed its name to Palomar Holdings, Inc. The company was incorporated in 2013 and is headquartered in La Jolla, California.

About Stewart Information Services

Stewart Information Services Corporation, through its subsidiaries, provides title insurance and real estate transaction related services in the United States and internationally. The company involves in searching, examining, closing, and insuring the condition of the title to real property. It also offers home and personal insurance services; services for tax-deferred exchanges; and digital customer engagement platform services. It also provides appraisal management, online notarization and closing, credit and real estate information, and search and valuation services. The company serves homebuyers and sellers, residential and commercial real estate professionals, mortgage lenders and servicers, title agencies and real estate attorneys, and home builders through direct operations, network of independent agencies, and other businesses. The company was founded in 1893 and is headquartered in Houston, Texas.