Critical Comparison: Palomar (NASDAQ:PLMR) vs. MetLife (NYSE:MET)

Palomar (NASDAQ:PLMR) and MetLife (NYSE:MET) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, dividends, earnings, profitability, valuation and risk.

Dividends

Palomar pays an annual dividend of $1.80 per share and has a dividend yield of 1.3%. MetLife pays an annual dividend of $2.37 per share and has a dividend yield of 2.4%. Palomar pays out 24.2% of its earnings in the form of a dividend. MetLife pays out 45.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. MetLife has raised its dividend for 12 consecutive years. MetLife is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

Palomar has a beta of 0.35, meaning that its stock price is 65% less volatile than the S&P 500. Comparatively, MetLife has a beta of 0.78, meaning that its stock price is 22% less volatile than the S&P 500.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Palomar	$875.97 million	4.03	$197.07 million	$7.44	18.04
MetLife	$77.08 billion	0.83	$3.38 billion	$5.22	19.16

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

Institutional & Insider Ownership

90.2% of Palomar shares are held by institutional investors. Comparatively, 95.0% of MetLife shares are held by institutional investors. 3.7% of Palomar shares are held by insiders. Comparatively, 0.4% of MetLife shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Palomar	18.61%	23.28%	6.45%
MetLife	4.57%	23.39%	0.89%

Analyst Ratings

This is a summary of recent ratings and price targets for Palomar and MetLife, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Palomar	0	0	5	1	3.17
MetLife	0	2	13	0	2.87

Palomar currently has a consensus target price of $160.00, suggesting a potential upside of 19.20%. MetLife has a consensus target price of $105.06, suggesting a potential upside of 5.06%. Given Palomar’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Palomar is more favorable than MetLife.

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.

About MetLife

MetLife, Inc., a financial services company, provides insurance, annuities, employee benefits, and asset management services worldwide. It operates through six segments: Retirement and Income Solutions; Group Benefits; Asia; Latin America; Europe, the Middle East and Africa; and MetLife Holdings. The company offers life, dental, group short-and long-term disability, individual disability, pet insurance, accidental death and dismemberment, vision, and accident and health coverages, as well as prepaid legal plans; administrative services-only arrangements to employers; and general and separate account, and synthetic guaranteed interest contracts, as well as private floating rate funding agreements. It also provides pension risk transfers, institutional income annuities, structured settlements, and capital markets investment products; and other products and services, such as life insurance products and funding agreements for funding postretirement benefits, as well as company, bank, or trust-owned life insurance used to finance nonqualified benefit programs for executives. In addition, it provides fixed, indexed-linked, and variable annuities; pension products; regular savings products; whole and term life, endowments, universal and variable life, and group life products; longevity reinsurance solutions; credit insurance products; and protection against long-term health care services. MetLife, Inc. was incorporated in 1999 and is based in New York, New York.