Axis Capital (NYSE:AXS) & Palomar (NASDAQ:PLMR) Critical Comparison

Axis Capital (NYSE:AXS) and Palomar (NASDAQ:PLMR) are both mid-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, risk, earnings, institutional ownership, analyst recommendations, valuation and profitability.

Earnings and Valuation

This table compares Axis Capital and Palomar”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Axis Capital	$5.96 billion	1.28	$1.08 billion	$10.40	9.37
Palomar	$679.67 million	4.86	$117.57 million	$5.69	21.65

Axis Capital has higher revenue and earnings than Palomar. Axis Capital 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

93.4% of Axis Capital shares are held by institutional investors. Comparatively, 90.3% of Palomar shares are held by institutional investors. 0.7% of Axis Capital shares are held by company insiders. Comparatively, 3.7% of Palomar shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Axis Capital	14.30%	18.77%	3.12%
Palomar	22.71%	20.35%	6.38%

Risk and Volatility

Axis Capital has a beta of 0.77, suggesting that its share price is 23% less volatile than the S&P 500. Comparatively, Palomar has a beta of 0.34, suggesting that its share price is 66% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and price targets for Axis Capital and Palomar, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Axis Capital	0	3	6	0	2.67
Palomar	0	2	5	0	2.71

Axis Capital presently has a consensus target price of $111.43, indicating a potential upside of 14.36%. Palomar has a consensus target price of $165.83, indicating a potential upside of 34.59%. Given Palomar’s stronger consensus rating and higher probable upside, analysts plainly believe Palomar is more favorable than Axis Capital.

Summary

Palomar beats Axis Capital on 8 of the 14 factors compared between the two stocks.

About Axis Capital

AXIS Capital Holdings Limited, through its subsidiaries, provides various specialty insurance and reinsurance products in Bermuda, the United States, and internationally. It operates through two segments, Insurance and Reinsurance. The Insurance segment offers professional insurance products that cover directors' and officers' liability, errors and omissions, employment practices, fiduciary, crime, professional indemnity, medical malpractice, and other financial insurance related coverages for commercial enterprises, financial institutions, not-for-profit organizations, and other professional service providers; and property insurance products for commercial buildings, residential premises, construction projects, property in transit, onshore renewable energy installations, and physical damage and business interruption following an act of terrorism. This segment also provides marine and aviation insurance services for offshore energy, renewable offshore energy, cargo, liability, including kidnap and ransom, fine art, specie, and hull war, hull and liability, and specific war coverage for passenger airlines, cargo operations, general aviation operations, airports, aviation authorities, security firms, and product manufacturers; personal accident, travel insurance, specialty health products for employer and affinity groups, and pet insurance products; and liability, cyber, and credit and political risk insurance services. The Reinsurance segment offers agriculture, marine and aviation, catastrophe, accidental and health, credit and surety, motor, professional, travel, life, engineering, property, and liability reinsurance products. AXIS Capital Holdings Limited was founded in 2001 and is headquartered in Pembroke, Bermuda.

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.