Head to Head Comparison: Watford (NASDAQ:WTRE) & Palomar (NASDAQ:PLMR)

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

Profitability

This table compares Watford and Palomar’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Watford 8.38% -30.56% -7.31%
Palomar 28.53% 18.64% 10.60%

Insider & Institutional Ownership

32.4% of Watford shares are held by institutional investors. Comparatively, 65.4% of Palomar shares are held by institutional investors. 1.6% of Watford shares are held by insiders. Comparatively, 7.7% of Palomar shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Watford and Palomar’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Watford $687.36 million 0.39 $62.54 million $2.00 6.77
Palomar $113.30 million 13.23 $10.62 million $1.73 35.71

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

Analyst Recommendations

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Watford 0 2 1 0 2.33
Palomar 0 1 6 0 2.86

Watford currently has a consensus target price of $20.00, indicating a potential upside of 47.82%. Palomar has a consensus target price of $55.33, indicating a potential downside of 10.43%. Given Watford’s higher probable upside, equities analysts plainly believe Watford is more favorable than Palomar.

Summary

Palomar beats Watford on 9 of the 13 factors compared between the two stocks.

Watford Company Profile

Watford Holdings Ltd., together with its subsidiaries, operates as a property, casualty, and mortgage insurance and reinsurance company worldwide. The company was founded in 2013 and is headquartered in Pembroke, Bermuda.

Palomar Company Profile

There is no company description available for Palomar Holdings Inc.

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