Critical Contrast: Patriot National (PN) and Genworth Financial (GNW)

Patriot National (NYSE: PN) and Genworth Financial (NYSE:GNW) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, dividends, risk, analyst recommendations, institutional ownership, valuation and earnings.

Profitability

This table compares Patriot National and Genworth Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Patriot National N/A N/A N/A
Genworth Financial 3.88% 1.57% 0.22%

Insider and Institutional Ownership

12.6% of Patriot National shares are owned by institutional investors. Comparatively, 68.1% of Genworth Financial shares are owned by institutional investors. 59.9% of Patriot National shares are owned by insiders. Comparatively, 0.3% of Genworth Financial shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Risk & Volatility

Patriot National has a beta of 2.73, suggesting that its stock price is 173% more volatile than the S&P 500. Comparatively, Genworth Financial has a beta of 2.8, suggesting that its stock price is 180% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Patriot National and Genworth Financial, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Patriot National 0 2 0 0 2.00
Genworth Financial 0 3 1 0 2.25

Patriot National currently has a consensus price target of $7.75, suggesting a potential upside of 604.55%. Genworth Financial has a consensus price target of $3.88, suggesting a potential upside of 14.64%. Given Patriot National’s higher probable upside, analysts clearly believe Patriot National is more favorable than Genworth Financial.

Valuation and Earnings

This table compares Patriot National and Genworth Financial’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Patriot National $232.83 million 0.13 -$820,000.00 ($0.02) -55.00
Genworth Financial $8.37 billion 0.20 -$277.00 million $0.67 5.04

Patriot National has higher revenue, but lower earnings than Genworth Financial. Patriot National is trading at a lower price-to-earnings ratio than Genworth Financial, indicating that it is currently the more affordable of the two stocks.

Summary

Genworth Financial beats Patriot National on 11 of the 14 factors compared between the two stocks.

Patriot National Company Profile

Patriot National, Inc. is an independent national provider of technology-enabled outsourcing solutions that help insurance carriers, employers and other clients mitigate risk and comply with complex regulations. It offers a range of end-to-end insurance related and specialty services. The Company principally offers approximately two types of services: front-end services, such as brokerage, underwriting and policyholder services, and back-end services, such as claims adjudication and administration. It also offers specialty services, including technology outsourcing and other information technology (IT) services, as well as employment pre-screening and background checks. The Company’s brokerage and policyholder services include general agency services and specialty underwriting and policyholder services provided to its insurance carrier clients. The Company’s claims administration services relate to the administration and resolution of workers’ compensation claims.

Genworth Financial Company Profile

Genworth Financial, Inc. (Genworth) is a financial security company. The Company provides insurance, wealth management, investment and financial solutions. As of December 31, 2011, the Company had more than 15 million customers, with a presence in more than 25 countries. The Company operates in Insurance, Mortgage Insurance and Corporate and Runoff. The Mortgage Insurance Division includes the business segments, such as International Mortgage Insurance and U.S. Mortgage Insurance. The Corporate and Runoff Division includes the Runoff segment and Corporate and Other activities. In September 2013, Genworth Financial, Inc closed the sale of its Wealth Management business, including Genworth Financial Wealth Management and alternative solutions provider, the Altegris companies, to a partnership of Aquiline Capital Partners and Genstar Capital.

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