Contrasting Atlantic American (NASDAQ:AAME) and Lemonade (NYSE:LMND)

Lemonade (NYSE:LMND) and Atlantic American (NASDAQ:AAME) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, institutional ownership, valuation, risk and profitability.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Lemonade	-14.19%	-26.78%	-7.08%
Atlantic American	N/A	N/A	N/A

Valuation & Earnings

This table compares Lemonade and Atlantic American”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lemonade	$737.90 million	4.15	-$165.50 million	($1.83)	-21.63
Atlantic American	$210.44 million	0.11	$6.02 million	$0.26	4.27

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

Institutional and Insider Ownership

80.3% of Lemonade shares are held by institutional investors. Comparatively, 5.5% of Atlantic American shares are held by institutional investors. 12.2% of Lemonade shares are held by insiders. Comparatively, 80.1% of Atlantic American shares are held 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.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Lemonade and Atlantic American, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lemonade	1	4	4	0	2.33
Atlantic American	1	0	0	0	1.00

Lemonade currently has a consensus price target of $61.12, indicating a potential upside of 54.39%. Given Lemonade’s stronger consensus rating and higher probable upside, research analysts clearly believe Lemonade is more favorable than Atlantic American.

Volatility and Risk

Lemonade has a beta of 1.98, suggesting that its share price is 98% more volatile than the S&P 500. Comparatively, Atlantic American has a beta of 0.87, suggesting that its share price is 13% less volatile than the S&P 500.

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.

About Atlantic American

Atlantic American Corporation, through its subsidiaries, provides life and health, and property and casualty insurance products in the United States. It operates through American Southern and Bankers Fidelity segments. The company offers property and casualty insurance products, including commercial automobile insurance coverage for state governments, local municipalities, and other motor pools and fleets; general liability; and inland marine insurance products. It also provides surety bond coverage for subdivision construction; school bus contracts; and performance and payment bonds. In addition, the company offers individual and group whole life insurance products; Medicare supplement insurance products; and other accident and health insurance products comprising various individual and group policies for the payment of standard benefits for the treatment of diagnosed cancer and other critical illnesses, as well as various other products, such as short-term nursing facility care, accident only, hospital indemnity, and disability coverages. It markets its products through independent agents and brokers. The company was founded in 1937 and is based in Atlanta, Georgia. Atlantic American Corporation is a subsidiary of Atlantic American / Delta Group.