Head-To-Head Survey: Palomar (NASDAQ:PLMR) versus Jackson Financial (NYSE:JXN)

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

Valuation and Earnings

This table compares Jackson Financial and Palomar”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Jackson Financial	$6.68 billion	1.40	$27.00 million	$0.71	194.82
Palomar	$875.97 million	3.99	$197.07 million	$7.44	17.87

Palomar has lower revenue, but higher earnings 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.

Analyst Recommendations

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

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

Jackson Financial currently has a consensus price target of $133.80, suggesting a potential downside of 3.27%. Palomar has a consensus price target of $162.75, suggesting a potential upside of 22.44%. Given Palomar’s stronger consensus rating and higher possible upside, analysts plainly believe Palomar is more favorable than Jackson Financial.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Jackson Financial	1.59%	18.93%	0.52%
Palomar	18.61%	23.28%	6.45%

Insider & Institutional Ownership

90.0% of Jackson Financial shares are owned by institutional investors. Comparatively, 90.2% of Palomar shares are owned by institutional investors. 1.4% of Jackson Financial shares are owned by insiders. Comparatively, 3.7% of Palomar shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

Jackson Financial pays an annual dividend of $3.60 per share and has a dividend yield of 2.6%. Palomar pays an annual dividend of $1.80 per share and has a dividend yield of 1.4%. 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. Palomar pays out 24.2% of its earnings in the form of a dividend. 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.

Volatility and Risk

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

Summary

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

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.

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.