Analyzing Skyward Specialty Insurance Group (NASDAQ:SKWD) and Palomar (NASDAQ:PLMR)

Skyward Specialty Insurance Group (NASDAQ:SKWD) and Palomar (NASDAQ:PLMR) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, risk, profitability, valuation, dividends and earnings.

Volatility and Risk

Skyward Specialty Insurance Group has a beta of 0.67, indicating that its stock price is 33% less volatile than the S&P 500. Comparatively, Palomar has a beta of 0.33, indicating that its stock price is 67% less volatile than the S&P 500.

Institutional & Insider Ownership

94.8% of Skyward Specialty Insurance Group shares are owned by institutional investors. Comparatively, 90.3% of Palomar shares are owned by institutional investors. 8.0% of Skyward Specialty Insurance Group shares are owned by company insiders. Comparatively, 4.3% of Palomar shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Skyward Specialty Insurance Group and Palomar, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Skyward Specialty Insurance Group	0	4	6	1	2.73
Palomar	0	3	4	0	2.57

Skyward Specialty Insurance Group presently has a consensus target price of $55.00, suggesting a potential upside of 14.51%. Palomar has a consensus target price of $127.33, suggesting a potential downside of 0.18%. Given Skyward Specialty Insurance Group’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Skyward Specialty Insurance Group is more favorable than Palomar.

Valuation and Earnings

This table compares Skyward Specialty Insurance Group and Palomar”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Skyward Specialty Insurance Group	$1.15 billion	1.68	$85.98 million	$2.89	16.62
Palomar	$553.86 million	6.14	$117.57 million	$4.48	28.47

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

Profitability

This table compares Skyward Specialty Insurance Group and Palomar’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Skyward Specialty Insurance Group	12.24%	16.39%	3.57%
Palomar	21.23%	19.76%	5.78%

Summary

Skyward Specialty Insurance Group beats Palomar on 8 of the 15 factors compared between the two stocks.

About Skyward Specialty Insurance Group

Skyward Specialty Insurance Group, Inc., an insurance holding company, underwrites commercial property and casualty insurance products in the United States. It offers general liability, excess liability, professional liability, commercial auto, group accident and health, property, surety, and workers' compensation insurance products. Skyward Specialty Insurance Group, Inc. was incorporated in 2006 and is headquartered in Houston, Texas.

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.