Financial Contrast: Lemonade (NYSE:LMND) vs. Kingsway Financial Services (NYSE:KFS)

Kingsway Financial Services (NYSE:KFS) and Lemonade (NYSE:LMND) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, earnings, dividends, risk, valuation, analyst recommendations and institutional ownership.

Institutional & Insider Ownership

72.4% of Kingsway Financial Services shares are held by institutional investors. Comparatively, 80.3% of Lemonade shares are held by institutional investors. 54.8% of Kingsway Financial Services shares are held by insiders. Comparatively, 12.5% of Lemonade shares are held by 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.

Profitability

This table compares Kingsway Financial Services and Lemonade’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Kingsway Financial Services	-3.63%	-7.83%	-0.74%
Lemonade	-43.51%	-32.85%	-12.59%

Valuation and Earnings

This table compares Kingsway Financial Services and Lemonade”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kingsway Financial Services	$103.24 million	2.36	$23.56 million	N/A	N/A
Lemonade	$429.80 million	5.70	-$236.90 million	($3.04)	-11.29

Kingsway Financial Services has higher earnings, but lower revenue than Lemonade.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Kingsway Financial Services and Lemonade, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kingsway Financial Services	0	0	0	0	0.00
Lemonade	3	3	1	0	1.71

Lemonade has a consensus target price of $23.33, suggesting a potential downside of 31.99%. Given Lemonade’s stronger consensus rating and higher probable upside, analysts clearly believe Lemonade is more favorable than Kingsway Financial Services.

Risk & Volatility

Kingsway Financial Services has a beta of -0.08, meaning that its share price is 108% less volatile than the S&P 500. Comparatively, Lemonade has a beta of 1.68, meaning that its share price is 68% more volatile than the S&P 500.

Summary

Lemonade beats Kingsway Financial Services on 7 of the 12 factors compared between the two stocks.

About Kingsway Financial Services

Kingsway Financial Services Inc., through its subsidiaries, engages in the extended warranty and business services in the United States. The company operates through two segments, Extended Warranty and Kingsway Search Xcelerator. The Extended Warranty segment markets, sells, and administers vehicle service agreements and related products for new and used automobiles, motorcycles, and ATVs. This segment also markets and distributes warranty products to manufacturers, distributors, and installers of heating, ventilation and air conditioning, standby generator, commercial LED lighting, and commercial refrigeration equipment; and provides equipment breakdown and maintenance support services to companies, as well as after-market vehicle protection services. The Kingsway Search Xcelerator offers outsourced finance and human resources consulting services, including operational accounting, such as bookkeeping, accounting, financial reporting, and analysis and strategic finance services; technical accounting comprising initial public offerings, Securities and Exchange Commission reporting, and international consolidation services; human resources, workforce management, and compliance support services; and advisory services. This segment also provides financial executive services for project and interim staffing engagements; search services for permanent placements; healthcare staffing services to acute healthcare facilities for short-term and day-to-day needs of hospitals; software products for the management needs of all types of shared-ownership properties; and fully managed outsourced cardiac telemetry services, as well as provides mobile monitors to the hospitals. The company offers its products and services through credit unions and dealers. Kingsway Financial Services Inc. was incorporated in 1989 and is headquartered in Chicago, Illinois.

About Lemonade

Lemonade, Inc. provides various insurance products through various channels in the United States, Europe, and the United Kingdom. Its insurance products include stolen or damaged property, and personal liability that protects its customers if they are responsible for an accident or damage to another person or their property. The company also offers renters, homeowners, car, pet, and life insurance products, as well as landlord insurance policies. In addition, it operates as an agent for other insurance companies. The company was formerly known as Lemonade Group, Inc. and changed its name to Lemonade, Inc. Lemonade, Inc. was incorporated in 2015 and is headquartered in New York, New York.