Head-to-head poll: Palomar (NASDAQ: PLMR) and Cincinnati Financial (NASDAQ: CINF)

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Cincinnati Financial (NASDAQ: CINFGet a rating) and Palomar (NASDAQ: PLMRGet a rating) are both finance companies, but which is the better stock? We will compare the two companies based on their risk strength, dividends, institutional ownership, earnings, analyst recommendations, profitability and valuation.

Valuation and benefits

This chart compares revenue, earnings per share (EPS), and valuation of Cincinnati Financial and Palomar.

Gross revenue Price/sales ratio Net revenue Earnings per share Price/earnings ratio
Cincinnati Financial $9.63 billion 1.98 $2.95 billion $12.59 9.42
Paloma $247.79 million 6.25 $45.85 million $1.68 36.61

Cincinnati Financial has higher revenues and profits than Palomar. Cincinnati Financial trades at a lower price-to-earnings ratio than Palomar, indicating that it is currently the more affordable of the two stocks.

Analyst Notes

This is a summary of Cincinnati Financial’s and Palomar’s current ratings, as reported by MarketBeat.

Sales Ratings Hold odds Buy reviews Strong buy odds Rating
Cincinnati Financial 0 1 1 0 2.50
Paloma 0 0 5 0 3.00

Cincinnati Financial currently has a consensus price target of $139.00, indicating a potential upside of 17.16%. Palomar has a consensus price target of $80.80, indicating a potential upside of 31.38%. Given Palomar’s stronger consensus rating and higher likely upside, analysts clearly think Palomar is more favorable than Cincinnati Financial.

Institutional and insider ownership

66.3% of Cincinnati Financial shares are held by institutional investors. Comparatively, 89.4% of Palomar shares are held by institutional investors. 3.0% of Cincinnati Financial shares are held by insiders. By comparison, 4.4% of Palomar shares are held by insiders. Strong institutional ownership indicates that hedge funds, large money managers, and endowments believe a company is poised for long-term growth.

Profitability

This chart compares the net margins, return on equity, and return on assets of Cincinnati Financial and Palomar.

Net margins Return on equity return on assets
Cincinnati Financial 23.82% 8.79% 3.54%
Paloma 15.82% 13.53% 5.76%

Risk and Volatility

Cincinnati Financial has a beta of 0.68, which means its stock price is 32% less volatile than the S&P 500. In comparison, Palomar has a beta of 0.18, which means its stock price is 82% less volatile than the S&P 500.

Summary

Palomar beats Cincinnati Financial on 9 of 14 factors compared between the two stocks.

About Cincinnati Financial (Get a rating)

Cincinnati Financial Corporation, together with its subsidiaries, provides property and casualty insurance products in the United States. The Company operates through five segments: Commercial Insurance, Personal Insurance, Excess and Surplus Insurance, Life Insurance and Investments. The Commercial Lines Insurance segment provides coverage for commercial accident, commercial property, commercial automobile and workers’ compensation. It also provides directors’ and officers’ liability insurance, contractual and commercial bonds, and loyalty bonds; and machinery and equipment coverage. The Personal Insurance segment offers personal automobile insurance; Home Insurance; and residential fire, inland marine, personal liability and watercraft insurance for individuals. The Excess and Surplus Lines Insurance segment offers commercial liability insurance that covers companies for liability for accidents occurring on their premises or resulting from their activities, such as injuries to products; and commercial property insurance, which insures buildings, inventory, equipment and business income against loss or damage from various causes, such as fire, wind, hail, water, theft and vandalism. The Life Insurance segment offers term life insurance products; universal life insurance products; construction site products, such as temporary life; and whole life insurance products. The Investments segment invests in investments with fixed maturities, including taxable and tax-exempt bonds and redeemable preferred shares; and equity investments including common and non-redeemable preferred shares. The company also offers commercial leasing and financing services; and insurance brokerage services. Cincinnati Financial Corporation was founded in 1950 and is headquartered in Fairfield, Ohio.

About Palomar (Get a rating)

Palomar Holdings, Inc., an insurance holding company, provides specialty property insurance to residential and commercial customers. The Company offers specialty personal and commercial property insurance products, including residential and commercial earthquake, commercial all-peril, specialty homeowner, inland marine, Hawaii hurricane and residential flood, as well as other products, such as assumed reinsurance, commercial flood, real estate errors and omissions, and real estate investor products. It markets and distributes its products through retail agents, wholesale brokers, program administrators and carrier partnerships. The company was previously known as GC Palomar Holdings. Palomar Holdings, Inc. was incorporated in 2013 and is headquartered in La Jolla, California.



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