Palomar (NASDAQ:PLMR) and Octave Specialty Group (NYSE:OSG) Head-To-Head Review

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

Profitability

This table compares Palomar and Octave Specialty Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Palomar	20.11%	22.62%	6.60%
Octave Specialty Group	-75.91%	-0.55%	-0.13%

Analyst Recommendations

This is a summary of current recommendations and price targets for Palomar and Octave Specialty Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Palomar	0	2	4	0	2.67
Octave Specialty Group	1	1	1	1	2.50

Palomar presently has a consensus price target of $147.75, indicating a potential upside of 16.90%. Octave Specialty Group has a consensus price target of $15.00, indicating a potential upside of 139.43%. Given Octave Specialty Group’s higher probable upside, analysts plainly believe Octave Specialty Group is more favorable than Palomar.

Insider and Institutional Ownership

90.3% of Palomar shares are held by institutional investors. Comparatively, 80.9% of Octave Specialty Group shares are held by institutional investors. 3.7% of Palomar shares are held by insiders. Comparatively, 7.2% of Octave Specialty Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Palomar and Octave Specialty Group”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	3.82	$197.07 million	$7.18	17.60
Octave Specialty Group	$455.58 million	0.62	-$261.69 million	($4.86)	-1.29

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

Risk and Volatility

Palomar has a beta of 0.44, meaning that its share price is 56% less volatile than the S&P 500. Comparatively, Octave Specialty Group has a beta of 0.86, meaning that its share price is 14% less volatile than the S&P 500.

Summary

Palomar beats Octave Specialty Group on 11 of the 15 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 Octave Specialty Group

Ambac Financial Group, Inc. operates as a financial services holding company. It operates three businesses: Specialty Property and Casualty Insurance, Insurance Distribution, and Legacy Financial Guarantee (LFG) Insurance. The Specialty Property and Casualty Insurance business provides specialty property and casualty program insurance with a focus commercial and personal liability risks. The Insurance Distribution business includes the specialty property and casualty insurance distribution business, which includes managing general agents and underwriters, insurance wholesalers, brokers, and other distribution businesses. The LFG Insurance business offers financial guarantee insurance policies that provide an unconditional and irrevocable guarantee, which protects the holder of a debt obligation against non-payment when due of the principal and interest on the obligations guaranteed. Ambac Financial Group, Inc. was incorporated in 1991 and is headquartered in New York, New York.