Head-To-Head Contrast: Lemonade (NYSE:LMND) and Tiptree (NASDAQ:TIPT)

Tiptree (NASDAQ:TIPT) and Lemonade (NYSE:LMND) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, earnings, dividends, risk, profitability, analyst recommendations and institutional ownership.

Earnings & Valuation

This table compares Tiptree and Lemonade’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tiptree	$1.65 billion	0.35	$13.95 million	$0.32	49.75
Lemonade	$429.80 million	2.62	-$236.90 million	($3.41)	-4.71

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

Analyst Ratings

This is a breakdown of current ratings and price targets for Tiptree and Lemonade, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tiptree	0	0	0	0	N/A
Lemonade	2	4	1	0	1.86

Lemonade has a consensus target price of $17.11, indicating a potential upside of 6.61%. Given Lemonade’s higher probable upside, analysts plainly believe Lemonade is more favorable than Tiptree.

Institutional and Insider Ownership

37.8% of Tiptree shares are held by institutional investors. Comparatively, 80.3% of Lemonade shares are held by institutional investors. 31.8% of Tiptree shares are held by company insiders. Comparatively, 11.7% of Lemonade shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Volatility & Risk

Tiptree has a beta of 1.19, meaning that its stock price is 19% more volatile than the S&P 500. Comparatively, Lemonade has a beta of 1.89, meaning that its stock price is 89% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Tiptree	0.85%	11.10%	1.30%
Lemonade	-55.12%	-31.29%	-14.50%

Summary

Tiptree beats Lemonade on 8 of the 13 factors compared between the two stocks.

About Tiptree

Tiptree Inc., through its subsidiaries, provides specialty insurance products and related services primarily in the United States. It operates through two segments: Insurance and Mortgage. The company offers niche; commercial lines insurance products, including professional liability, general liability, contractual liability protection, property and other short-tail, and alternative risks insurance products; and personal lines insurance products, such as credit protection surrounding loan payments. It also provides auto and consumer warranty programs, including mobile devices, consumer electronics, appliances, furniture; and vehicle service contracts, GAP, and ancillary products; as well as premium or warranty contract financing services, lead generation support, and business process outsourcing services. In addition, the company offers mortgage loans for institutional investors; asset management services; and maritime shipping and asset management services, as well as invests in shares. It markets its products through a network of independent insurance agents, consumer finance companies, online retailers, auto dealers, and regional big box retailers. The company was formerly known as Tiptree Financial Inc. and changed its name to Tiptree Inc. in December 2016. Tiptree Inc. was founded in 1978 and is headquartered in Greenwich, Connecticut.

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.