The Hanover Insurance Group (NYSE:THG) and Palomar (NASDAQ:PLMR) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, dividends, valuation, institutional ownership, earnings, profitability and risk.
Volatility & Risk
The Hanover Insurance Group has a beta of 0.92, meaning that its share price is 8% less volatile than the S&P 500. Comparatively, Palomar has a beta of -0.13, meaning that its share price is 113% less volatile than the S&P 500.
Profitability
This table compares The Hanover Insurance Group and Palomar's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| The Hanover Insurance Group | 6.35% | 10.90% | 2.54% |
| Palomar | 11.97% | 6.95% | 3.98% |
Analyst Recommendations
This is a summary of recent recommendations and price targets for The Hanover Insurance Group and Palomar, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| The Hanover Insurance Group | 0 | 2 | 2 | 0 | 2.50 |
| Palomar | 0 | 2 | 2 | 0 | 2.50 |
The Hanover Insurance Group presently has a consensus target price of $125.25, suggesting a potential downside of 1.66%. Palomar has a consensus target price of $97.20, suggesting a potential upside of 25.81%. Given Palomar's higher possible upside, analysts plainly believe Palomar is more favorable than The Hanover Insurance Group.
Valuation and Earnings
This table compares The Hanover Insurance Group and Palomar's gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| The Hanover Insurance Group | $4.89 billion | 0.94 | $425.10 million | $8.16 | 15.51 |
| Palomar | $113.30 million | 17.22 | $10.62 million | $1.73 | 44.18 |
The Hanover Insurance Group has higher revenue and earnings than Palomar. The Hanover 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.
Institutional & Insider Ownership
85.0% of The Hanover Insurance Group shares are held by institutional investors. Comparatively, 90.7% of Palomar shares are held by institutional investors. 2.2% of The Hanover Insurance Group 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, endowments and hedge funds believe a company will outperform the market over the long term.
Summary
Palomar beats The Hanover Insurance Group on 7 of the 12 factors compared between the two stocks.
