Analyzing Palomar (NASDAQ:PLMR) & Atlantic American (NASDAQ:AAME)

Atlantic American (NASDAQ:AAME) and Palomar (NASDAQ:PLMR) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, earnings, analyst recommendations, valuation, profitability, dividends and risk.

Volatility and Risk

Atlantic American has a beta of 0.77, meaning that its stock price is 23% less volatile than the S&P 500. Comparatively, Palomar has a beta of 0.4, meaning that its stock price is 60% less volatile than the S&P 500.

Earnings & Valuation

This table compares Atlantic American and Palomar”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Atlantic American	$188.23 million	0.16	-$4.27 million	$0.22	6.55
Palomar	$875.97 million	3.85	$197.07 million	$7.44	17.23

Palomar has higher revenue and earnings than Atlantic American. Atlantic American 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 current ratings for Atlantic American and Palomar, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Atlantic American	1	0	0	0	1.00
Palomar	0	2	4	0	2.67

Palomar has a consensus price target of $162.75, suggesting a potential upside of 26.98%. Given Palomar’s stronger consensus rating and higher possible upside, analysts plainly believe Palomar is more favorable than Atlantic American.

Insider & Institutional Ownership

5.5% of Atlantic American shares are owned by institutional investors. Comparatively, 90.2% of Palomar shares are owned by institutional investors. 80.1% of Atlantic American shares are owned by insiders. Comparatively, 3.7% of Palomar shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Atlantic American	N/A	N/A	N/A
Palomar	18.61%	23.28%	6.45%

Summary

Palomar beats Atlantic American on 12 of the 14 factors compared between the two stocks.

About Atlantic American

Atlantic American Corporation, through its subsidiaries, provides life and health, and property and casualty insurance products in the United States. It operates through American Southern and Bankers Fidelity segments. The company offers property and casualty insurance products, including commercial automobile insurance coverage for state governments, local municipalities, and other motor pools and fleets; general liability; and inland marine insurance products. It also provides surety bond coverage for subdivision construction; school bus contracts; and performance and payment bonds. In addition, the company offers individual and group whole life insurance products; Medicare supplement insurance products; and other accident and health insurance products comprising various individual and group policies for the payment of standard benefits for the treatment of diagnosed cancer and other critical illnesses, as well as various other products, such as short-term nursing facility care, accident only, hospital indemnity, and disability coverages. It markets its products through independent agents and brokers. The company was founded in 1937 and is based in Atlanta, Georgia. Atlantic American Corporation is a subsidiary of Atlantic American / Delta Group.

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.