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

Volatility & Risk

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

Insider and Institutional Ownership

67.7% of Genworth Financial shares are owned by institutional investors. Comparatively, 13.5% of Patriot National shares are owned by institutional investors. 0.3% of Genworth Financial shares are owned by company insiders. Comparatively, 59.9% of Patriot National shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

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

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Genworth Financial $8.37 billion 0.21 -$277.00 million $0.67 5.33
Patriot National $232.83 million 0.14 -$820,000.00 ($0.02) -60.00

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.

Analyst Ratings

This is a summary of recent 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 target price of $3.88, suggesting a potential upside of 8.54%. Patriot National has a consensus target price of $7.75, suggesting a potential upside of 545.83%. Given Patriot National’s higher probable upside, analysts clearly believe Patriot National is more favorable than Genworth Financial.

Summary

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

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.

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.

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