Lemonade (NYSE:LMND) and Equitable (NYSE:EQH) Financial Analysis

Equitable (NYSE:EQH) and Lemonade (NYSE:LMND) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, valuation, institutional ownership, analyst recommendations, profitability, dividends and earnings.

Risk & Volatility

Equitable has a beta of 1.12, suggesting that its share price is 12% more volatile than the S&P 500. Comparatively, Lemonade has a beta of 2.12, suggesting that its share price is 112% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Equitable and Lemonade, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Equitable	2	0	8	2	2.83
Lemonade	3	1	5	0	2.22

Equitable presently has a consensus target price of $59.55, suggesting a potential upside of 64.33%. Lemonade has a consensus target price of $68.75, suggesting a potential upside of 12.05%. Given Equitable’s stronger consensus rating and higher probable upside, equities analysts plainly believe Equitable is more favorable than Lemonade.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Equitable	-11.83%	140.87%	0.58%
Lemonade	-22.43%	-31.19%	-8.67%

Valuation and Earnings

This table compares Equitable and Lemonade”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Equitable	$11.67 billion	0.87	-$1.38 billion	($4.82)	-7.52
Lemonade	$737.90 million	6.35	-$165.50 million	($2.26)	-27.15

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

Institutional and Insider Ownership

92.7% of Equitable shares are held by institutional investors. Comparatively, 80.3% of Lemonade shares are held by institutional investors. 1.1% of Equitable shares are held by insiders. Comparatively, 12.5% of Lemonade shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

Equitable beats Lemonade on 10 of the 15 factors compared between the two stocks.

About Equitable

Equitable Holdings, Inc., together with its consolidated subsidiaries, operates as a diversified financial services company worldwide. The company operates through six segments: Individual Retirement, Group Retirement, Investment Management and Research, Protection Solutions, Wealth Management, and Legacy. The Individual Retirement segment offers a suite of variable annuity products primarily to affluent and high net worth individuals. The Group Retirement segment provides tax-deferred investment and retirement services or products to plans sponsored by educational entities, municipalities, and not-for-profit entities, as well as small and medium-sized businesses. The Investment Management and Research segment offers diversified investment management, research, and related services to various clients through institutional. The Protection Solutions segment provides life insurance products, such as VUL insurance and IUL insurance, term life, and employee benefits business, such as dental, vision, life, as well as short- and long-term disability insurance products to small and medium-sized businesses. The Wealth Management segment offers discretionary and non-discretionary investment advisory accounts, financial planning and advice, life insurance, and annuity products. The Legacy segment consists of the capital intensive fixed-rate GMxB business that includes ROP death benefits. The company was formerly known as AXA Equitable Holdings, Inc. and changed its name to Equitable Holdings, Inc. in January 2020. Equitable Holdings, Inc. was founded in 1859 and is based in New York, New York.

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.