Financial Survey: Palomar (NASDAQ:PLMR) and Safety Insurance Group (NASDAQ:SAFT)

Safety Insurance Group (NASDAQ:SAFT) and Palomar (NASDAQ:PLMR) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitability, risk, dividends, valuation, analyst recommendations, earnings and institutional ownership.

Risk & Volatility

Safety Insurance Group has a beta of 0.19, indicating that its share price is 81% less volatile than the S&P 500. Comparatively, Palomar has a beta of 0.36, indicating that its share price is 64% less volatile than the S&P 500.

Earnings and Valuation

This table compares Safety Insurance Group and Palomar”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Safety Insurance Group	$1.08 billion	1.13	$18.88 million	$5.05	16.30
Palomar	$503.54 million	5.53	$79.20 million	$4.21	24.98

Palomar has lower revenue, but higher earnings than Safety Insurance Group. Safety 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.

Analyst Ratings

This is a summary of recent ratings and price targets for Safety Insurance Group and Palomar, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Safety Insurance Group	0	0	0	0	0.00
Palomar	0	3	4	0	2.57

Palomar has a consensus target price of $111.67, indicating a potential upside of 6.17%. Given Palomar’s stronger consensus rating and higher probable upside, analysts plainly believe Palomar is more favorable than Safety Insurance Group.

Insider and Institutional Ownership

81.0% of Safety Insurance Group shares are owned by institutional investors. Comparatively, 90.3% of Palomar shares are owned by institutional investors. 2.0% of Safety Insurance Group shares are owned by insiders. Comparatively, 4.3% of Palomar shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Safety Insurance Group	6.86%	6.35%	2.41%
Palomar	21.55%	19.65%	5.51%

Summary

Palomar beats Safety Insurance Group on 12 of the 14 factors compared between the two stocks.

About Safety Insurance Group

Safety Insurance Group, Inc. provides private passenger and commercial automobile, and homeowner insurance in the United States. The company’s private passenger automobile policies offer coverage for bodily injury and property damage to others, no-fault personal injury coverage for the insured/insured’s car occupants, and physical damage coverage for an insured’s own vehicle for collision or other perils. It also provides commercial automobile policies that offer insurance for commercial vehicles used for business purposes, including private passenger-type vehicles, trucks, tractors and trailers, insure individual vehicles, and commercial fleets; and homeowners policies, which provide coverage for homes, condominiums, and apartments for losses to a dwelling and its contents from various perils, and coverage for liability to others arising from ownership or occupancy. In addition, the company offers business owners policies that cover apartments and residential condominiums, restaurants, office condominiums, processing and services businesses, special trade contractors, and wholesalers. Further, it provides personal umbrella policies, which provide personal excess liability coverage over and above the limits of individual automobile, watercraft, and homeowner’s insurance policies; and commercial umbrella, which offers an excess liability product to clients, as well as underwrites dwelling fire insurance for non-owner-occupied residences. Additionally, the company offers inland marine coverage for homeowners and business owner policies, and watercraft coverage for small and medium sized pleasure crafts. It distributes its products through independent agents. The company was formerly known as Safety Holdings Inc and changed its name to Safety Insurance Group, Inc. in April 2002. Safety Insurance Group, Inc. was founded in 1979 and is headquartered in Boston, Massachusetts.

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.