Comparing Palomar (NASDAQ:PLMR) & Third Point Reinsurance (NASDAQ:TPRE)

Palomar (NASDAQ:PLMR) and Third Point Reinsurance (NYSE:TPRE) are both small-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, earnings, analyst recommendations, valuation, risk, dividends and institutional ownership.

Profitability

This table compares Palomar and Third Point Reinsurance’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Palomar 28.53% 18.64% 10.60%
Third Point Reinsurance 20.42% -8.55% -3.38%

Earnings & Valuation

This table compares Palomar and Third Point Reinsurance’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Palomar $113.30 million 16.36 $10.62 million $1.73 44.17
Third Point Reinsurance $982.70 million 0.71 $200.62 million $2.16 3.41

Third Point Reinsurance has higher revenue and earnings than Palomar. Third Point Reinsurance is trading at a lower price-to-earnings ratio than Palomar, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

80.2% of Palomar shares are held by institutional investors. Comparatively, 69.6% of Third Point Reinsurance shares are held by institutional investors. 7.7% of Palomar shares are held by insiders. Comparatively, 9.2% of Third Point Reinsurance shares are held 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.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Palomar and Third Point Reinsurance, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Palomar 0 1 6 0 2.86
Third Point Reinsurance 0 0 0 0 N/A

Palomar presently has a consensus price target of $55.33, suggesting a potential downside of 27.59%. Given Palomar’s higher possible upside, research analysts clearly believe Palomar is more favorable than Third Point Reinsurance.

Risk & Volatility

Palomar has a beta of -0.12, indicating that its share price is 112% less volatile than the S&P 500. Comparatively, Third Point Reinsurance has a beta of 1.01, indicating that its share price is 1% more volatile than the S&P 500.

Summary

Palomar beats Third Point Reinsurance on 8 of the 13 factors compared between the two stocks.

About Palomar

There is no company description available for Palomar Holdings Inc.

About Third Point Reinsurance

Third Point Reinsurance Ltd., through its subsidiaries, provides specialty property and casualty reinsurance products to insurance and reinsurance companies worldwide. It underwrites homeowners' and commercial, workers' compensation, personal automobile, mortgage, and multi-line reinsurance products; professional, transactional, and general liability reinsurance products; and marine, travel, and extended warranty reinsurance products. The company was incorporated in 2011 and is based in Pembroke, Bermuda.

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