Critical Contrast: Sompo (OTCMKTS:SMPNY) vs. Lemonade (NYSE:LMND)

Lemonade (NYSE:LMND) and Sompo (OTCMKTS:SMPNY) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, analyst recommendations, institutional ownership, risk, earnings, valuation and dividends.

Analyst Ratings

This is a summary of current recommendations and price targets for Lemonade and Sompo, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lemonade	4	1	1	1	1.86
Sompo	0	0	0	0	0.00

Lemonade presently has a consensus price target of $48.67, suggesting a potential downside of 30.93%. Given Lemonade’s stronger consensus rating and higher probable upside, analysts clearly believe Lemonade is more favorable than Sompo.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Lemonade	-26.39%	-31.86%	-9.20%
Sompo	8.14%	13.04%	2.83%

Volatility & Risk

Lemonade has a beta of 2.27, suggesting that its stock price is 127% more volatile than the S&P 500. Comparatively, Sompo has a beta of 0.39, suggesting that its stock price is 61% less volatile than the S&P 500.

Earnings and Valuation

This table compares Lemonade and Sompo”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lemonade	$658.60 million	8.00	-$202.20 million	($2.39)	-29.48
Sompo	$35.81 billion	0.79	$2.79 billion	$1.49	10.15

Sompo has higher revenue and earnings than Lemonade. Lemonade is trading at a lower price-to-earnings ratio than Sompo, 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. 14.7% of Lemonade shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

Lemonade beats Sompo on 8 of the 15 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 Sompo

Sompo Holdings, Inc. provides property and casualty (P&C) insurance services in Japan and internationally. The company operates through Domestic P&C Insurance Business, Overseas Insurance Business, Domestic Life Insurance Business, and Nursing Care & Seniors Business segments. It offers various P&C insurance products, including automobile, fire, personal accident, and marine, as well as security, risk management, assistance, and warranty services; and life insurance products. The company also provides nursing care and seniors services; and customer security, health, and wellbeing support services. In addition, it offers asset management services; home remodeling services; and health support services comprising health guidance and employee assistance programs. The company was formerly known as Sompo Japan Nipponkoa Holdings, Inc. and changed its name to Sompo Holdings, Inc. in October 2016. The company was incorporated in 2010 and is headquartered in Tokyo, Japan.