Financial Review: Palomar (NASDAQ:PLMR) vs. Jackson Financial (NYSE:JXN)

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

Valuation & Earnings

This table compares Palomar and Jackson Financial”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	18.01
Jackson Financial	$6.34 billion	1.46	$27.00 million	$0.71	192.36

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

Insider and Institutional Ownership

90.2% of Palomar shares are held by institutional investors. Comparatively, 90.0% of Jackson Financial shares are held by institutional investors. 3.7% of Palomar shares are held by insiders. Comparatively, 1.4% of Jackson Financial shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Dividends

Palomar pays an annual dividend of $1.80 per share and has a dividend yield of 1.3%. Jackson Financial pays an annual dividend of $3.60 per share and has a dividend yield of 2.6%. Palomar pays out 24.2% of its earnings in the form of a dividend. Jackson Financial pays out 507.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Jackson Financial has increased its dividend for 4 consecutive years. Jackson Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of current ratings for Palomar and Jackson Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Palomar	0	1	5	0	2.83
Jackson Financial	0	4	2	1	2.57

Palomar currently has a consensus target price of $162.75, suggesting a potential upside of 21.43%. Jackson Financial has a consensus target price of $133.80, suggesting a potential downside of 2.03%. Given Palomar’s stronger consensus rating and higher possible upside, equities analysts plainly believe Palomar is more favorable than Jackson Financial.

Profitability

This table compares Palomar and Jackson Financial’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%
Jackson Financial	1.59%	18.93%	0.52%

Risk and Volatility

Palomar has a beta of 0.39, suggesting that its share price is 61% less volatile than the S&P 500. Comparatively, Jackson Financial has a beta of 1.3, suggesting that its share price is 30% more volatile than the S&P 500.

Summary

Palomar beats Jackson Financial on 12 of the 18 factors compared between the two stocks.

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 Jackson Financial

Jackson Financial Inc., through its subsidiaries, provides suite of annuities to retail investors in the United States. The company operates through three segments: Retail Annuities, Institutional Products, and Closed Life and Annuity Blocks. The Retail Annuities segment offers various retirement income and savings products, including variable, fixed index, fixed, and payout annuities, as well as registered index-linked annuities and lifetime income solutions. The Institutional Products segment provides traditional guaranteed investment contracts; funding agreements comprising agreements issued in conjunction with its participation in the U.S. federal home loan bank program; and medium-term funding agreement-backed notes. The Closed Life and Annuity Blocks segment offers various protection products, such as whole life, universal life, variable universal life, and term life insurance products, as well as fixed, fixed index, and payout annuities; and a block of group payout annuities. The company also offers investment management services. It sells its products through a distribution network that includes independent broker-dealers, wirehouses, regional broker-dealers, banks, independent registered investment advisors, third-party platforms, and insurance agents. The company was formerly known as Brooke (Holdco1) Inc. and changed its name to Jackson Financial Inc. in July 2020. Jackson Financial Inc. was incorporated in 2006 and is headquartered in Lansing, Michigan.