Head-To-Head Analysis: Skyward Specialty Insurance Group (NASDAQ:SKWD) and Lemonade (NYSE:LMND)

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

Profitability

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

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

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Skyward Specialty Insurance Group	$885.97 million	1.65	$85.98 million	$2.24	16.37
Lemonade	$429.80 million	2.70	-$236.90 million	($3.41)	-4.84

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.

Volatility & Risk

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

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Skyward Specialty Insurance Group and Lemonade, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Skyward Specialty Insurance Group	0	1	7	1	3.00
Lemonade	2	4	0	0	1.67

Skyward Specialty Insurance Group currently has a consensus price target of $39.67, indicating a potential upside of 8.20%. Lemonade has a consensus price target of $14.25, indicating a potential downside of 13.66%. Given Skyward Specialty Insurance Group’s stronger consensus rating and higher probable upside, research analysts clearly believe Skyward Specialty Insurance Group is more favorable than Lemonade.

Insider & Institutional Ownership

94.8% of Skyward Specialty Insurance Group shares are owned by institutional investors. Comparatively, 80.3% of Lemonade shares are owned by institutional investors. 11.7% of Lemonade 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.

Summary

Skyward Specialty Insurance Group beats Lemonade on 12 of the 15 factors compared between the two stocks.

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.

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.