Patriot National (NYSE: PN) and National General Holdings Corp (NASDAQ:NGHC) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their valuation, dividends, analyst recommendations, risk, earnings, profitabiliy and institutional ownership.

Dividends

National General Holdings Corp pays an annual dividend of $0.16 per share and has a dividend yield of 0.8%. Patriot National does not pay a dividend. National General Holdings Corp pays out 13.6% of its earnings in the form of a dividend.

Institutional & Insider Ownership

15.7% of Patriot National shares are owned by institutional investors. Comparatively, 53.4% of National General Holdings Corp shares are owned by institutional investors. 59.9% of Patriot National shares are owned by company insiders. Comparatively, 3.4% of National General Holdings Corp shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Patriot National and National General Holdings Corp’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Patriot National $233.03 million 0.25 $31.71 million ($0.02) -106.50
National General Holdings Corp $3.84 billion 0.57 $277.98 million $1.18 17.46

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

Risk & Volatility

Patriot National has a beta of 2.74, indicating that its share price is 174% more volatile than the S&P 500. Comparatively, National General Holdings Corp has a beta of 1.25, indicating that its share price is 25% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings for Patriot National and National General Holdings Corp, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Patriot National 0 2 0 0 2.00
National General Holdings Corp 0 1 2 0 2.67

Patriot National currently has a consensus price target of $7.75, suggesting a potential upside of 263.85%. National General Holdings Corp has a consensus price target of $25.00, suggesting a potential upside of 21.36%. Given Patriot National’s higher possible upside, equities research analysts plainly believe Patriot National is more favorable than National General Holdings Corp.

Profitability

This table compares Patriot National and National General Holdings Corp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Patriot National -0.35% 7.15% 1.91%
National General Holdings Corp 3.70% 10.43% 2.23%

Summary

National General Holdings Corp beats Patriot National on 12 of the 16 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.

National General Holdings Corp Company Profile

National General Holdings Corp. is a specialty personal lines insurance holding company. Through its subsidiaries, the Company provides a range of insurance products, including personal and commercial automobile, homeowners, umbrella, recreational vehicle, supplemental health, lender-placed and other niche products. It operates through two segments: Property and Casualty (P&C) and Accident and Health (A&H). Its P&C segment offers its P&C insurance products through a network of agents, a number of affinity partners and through direct-response marketing programs. Its A&H segment provides accident and non-major medical health insurance products targeting its existing P&C policyholders and the anticipated market of employed persons who are uninsured or underinsured. The P&C segment operates its business through three distribution channels: agency, affinity and direct. The A&H segment provides supplemental accident and health insurance products.

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