10 Best Property & Casualty Insurance Stocks to Buy

5) Palomar Holdings, Inc. (NASDAQ:PLMR)

Average Upside Potential: 13.80%

Palomar Holdings, Inc. (NASDAQ:PLMR) is a United States-based company, which is focused on providing specialty property insurance mainly earthquake, wind, and flood insurance products.

In 2Q 2024, the company saw operating income of $1.25 per share, beating the analysts’ estimates by over ~11%. The bottom line of the company went up by ~45.3% YoY. Palomar Holdings, Inc. (NASDAQ:PLMR)’s earnings were supported by improved premiums, higher adjusted underwriting income, and improved yields on invested assets.

Total revenues surpassed the analysts’ expectations by ~9.2% to reach $131 million, reflecting an improvement of 47.2% YoY. This was primarily because of higher premiums, commissions, and other income and net investment income.

For FY24, Palomar Holdings, Inc. (NASDAQ:PLMR) is increasing its guidance range and anticipates achieving adjusted net income of $124 million – $130 million. Wall Street analysts anticipate better-than-expected performance of its new crop insurance business and positive indicators about reinsurance costs. These factors have put the company ahead of its financial targets. The company plans to double its underwriting income over 3-5 years while generating an adjusted ROE of over 20%.

Truist Financial raised its price objective on shares of Palomar Holdings, Inc. (NASDAQ:PLMR) from $100.00 to $112.00, giving the company a “Buy” rating on 8^th August. Diamond Hill Capital, an investment management company, released its first-quarter 2024 investor letter and mentioned Palomar Holdings, Inc. (NASDAQ:PLMR). Here is what the fund said:

“Among our bottom Q1 contributors were our short positions in Dick’s Sporting Goods, International Business Machines (IBM) and Palomar Holdings, Inc. (NASDAQ:PLMR). Residential and business property and casualty insurance company Palomar has benefited from solid fundamentals, even amid a difficult reinsurance environment in 2023. However, we believe shares remain overvalued and are maintaining our short position.”