Reviewing Lemonade (NYSE:LMND) and Skyward Specialty Insurance Group (NASDAQ:SKWD)

Lemonade (NYSE:LMND) and Skyward Specialty Insurance Group (NASDAQ:SKWD) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, earnings, profitability, risk, institutional ownership, analyst recommendations and dividends.

Profitability

This table compares Lemonade and Skyward Specialty Insurance Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lemonade	-55.12%	-31.29%	-14.50%
Skyward Specialty Insurance Group	9.56%	14.31%	2.84%

Institutional & Insider Ownership

80.3% of Lemonade shares are owned by institutional investors. Comparatively, 94.8% of Skyward Specialty Insurance Group shares are owned by institutional investors. 11.7% of Lemonade shares are owned by insiders. Comparatively, 9.5% of Skyward Specialty Insurance Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Lemonade and Skyward Specialty Insurance Group’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lemonade	$429.80 million	2.74	-$236.90 million	($3.41)	-4.92
Skyward Specialty Insurance Group	$895.40 million	1.60	$85.98 million	$2.24	16.00

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

Analyst Ratings

This is a summary of current ratings for Lemonade and Skyward Specialty Insurance Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lemonade	2	4	0	0	1.67
Skyward Specialty Insurance Group	0	1	6	1	3.00

Lemonade currently has a consensus price target of $14.25, indicating a potential downside of 15.08%. Skyward Specialty Insurance Group has a consensus price target of $39.67, indicating a potential upside of 10.71%. Given Skyward Specialty Insurance Group’s stronger consensus rating and higher probable upside, analysts plainly believe Skyward Specialty Insurance Group is more favorable than Lemonade.

Risk & Volatility

Lemonade has a beta of 1.89, suggesting that its stock price is 89% more volatile than the S&P 500. Comparatively, Skyward Specialty Insurance Group has a beta of 0.45, suggesting that its stock price is 55% less volatile than the S&P 500.

Summary

Skyward Specialty Insurance Group beats Lemonade on 12 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 Skyward Specialty Insurance Group

Skyward Specialty Insurance Group, Inc., an insurance holding company, underwrites commercial property and casualty insurance products in the United States. It offers general liability, excess liability, professional liability, commercial auto, group accident and health, property, surety, and workers' compensation insurance products. The company was incorporated in 2006 and is headquartered in Houston, Texas.