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

Insider & Institutional Ownership

66.9% of Genworth Financial shares are owned by institutional investors. Comparatively, 10.9% of Patriot National shares are owned by institutional investors. 0.3% of Genworth Financial shares are owned by insiders. Comparatively, 59.9% of Patriot National shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and recommmendations for Genworth Financial and Patriot National, as reported by MarketBeat.

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

Genworth Financial presently has a consensus price target of $3.88, indicating a potential upside of 16.72%. Patriot National has a consensus price target of $7.75, indicating a potential upside of 2,052.78%. Given Patriot National’s higher possible upside, analysts clearly believe Patriot National is more favorable than Genworth Financial.

Earnings and Valuation

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Genworth Financial $8.37 billion 0.20 -$277.00 million $0.67 4.96
Patriot National $232.83 million 0.04 -$820,000.00 ($0.02) -18.00

Patriot National has lower revenue, but higher 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.

Profitability

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

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

Summary

Genworth Financial beats Patriot National on 10 of the 13 factors compared between the two stocks.

About Genworth Financial

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.

About Patriot National

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.

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