Reviewing Lemonade (NYSE:LMND) and SelectQuote (NYSE:SLQT)

Lemonade (NYSE:LMND) and SelectQuote (NYSE:SLQT) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, institutional ownership, risk, earnings, dividends and valuation.

Profitability

This table compares Lemonade and SelectQuote’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lemonade	-33.96%	-36.12%	-10.93%
SelectQuote	0.25%	1.17%	0.30%

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Lemonade and SelectQuote, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lemonade	4	1	1	0	1.50
SelectQuote	0	2	1	1	2.75

Lemonade currently has a consensus price target of $30.50, suggesting a potential downside of 37.65%. SelectQuote has a consensus price target of $4.4167, suggesting a potential upside of 128.25%. Given SelectQuote’s stronger consensus rating and higher possible upside, analysts plainly believe SelectQuote is more favorable than Lemonade.

Valuation & Earnings

This table compares Lemonade and SelectQuote”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lemonade	$526.50 million	6.87	-$202.20 million	($2.83)	-17.29
SelectQuote	$1.32 billion	0.25	-$34.12 million	($0.11)	-17.59

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

Insider and Institutional Ownership

80.3% of Lemonade shares are owned by institutional investors. Comparatively, 34.6% of SelectQuote shares are owned by institutional investors. 12.5% of Lemonade shares are owned by company insiders. Comparatively, 11.4% of SelectQuote shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Risk and Volatility

Lemonade has a beta of 2.19, suggesting that its share price is 119% more volatile than the S&P 500. Comparatively, SelectQuote has a beta of 1.22, suggesting that its share price is 22% more volatile than the S&P 500.

Summary

SelectQuote beats Lemonade on 9 of the 14 factors compared between the two stocks.

About Lemonade

Lemonade, Inc. provides various insurance products through various channels in the United States, Europe, and the United Kingdom. Its insurance products include stolen or damaged property, and personal liability that protects its customers if they are responsible for an accident or damage to another person or their property. The company also offers renters, homeowners, car, pet, and life insurance products, as well as landlord insurance policies. In addition, it operates as an agent for other insurance companies. The company was formerly known as Lemonade Group, Inc. and changed its name to Lemonade, Inc. Lemonade, Inc. was incorporated in 2015 and is headquartered in New York, New York.

About SelectQuote

SelectQuote, Inc. operates a technology-enabled, direct-to-consumer distribution platform that sells a range of insurance products and healthcare services in the United States. The company operates through three segments: Senior; Life; and Auto & Home. It distributes senior health policies, such as medicare advantage, medicare supplement, medicare part D, and other ancillary senior health insurance related products, including prescription drugs, dental, vision, and hearing plans; life insurance products, such as term life, final expense, and other ancillary products, including critical illness, accidental death, and juvenile insurance; homeowners, auto, dwelling fire, and other ancillary insurance products; and non-commercial auto and home property, and casualty policies. The company also provides SelectRx, an accredited patient-centered pharmacy home pharmacy, which offers essential prescription medications, OTC medications, customized medication packaging, medication therapy management, and long-term pharmacy care; and population health that helps members understand the benefits available under their health plans, and contracts with insurance carriers. SelectQuote, Inc. was incorporated in 1999 and is headquartered in Overland Park, Kansas.