Contrasting Lemonade (NYSE:LMND) and BlackRock TCP Capital (NASDAQ:TCPC)

Lemonade (NYSE:LMND) and BlackRock TCP Capital (NASDAQ:TCPC) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their earnings, institutional ownership, valuation, risk, dividends, profitability and analyst recommendations.

Valuation & Earnings

This table compares Lemonade and BlackRock TCP Capital”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lemonade	$429.80 million	5.54	-$236.90 million	($3.04)	-10.96
BlackRock TCP Capital	-$21.83 million	-37.05	$38.47 million	($0.50)	-18.90

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

Volatility and Risk

Lemonade has a beta of 2.15, suggesting that its share price is 115% more volatile than the S&P 500. Comparatively, BlackRock TCP Capital has a beta of 1.5, suggesting that its share price is 50% more volatile than the S&P 500.

Institutional & Insider Ownership

80.3% of Lemonade shares are owned by institutional investors. 12.5% of Lemonade shares are owned by insiders. Comparatively, 0.2% of BlackRock TCP Capital shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Lemonade and BlackRock TCP Capital, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lemonade	3	2	1	0	1.67
BlackRock TCP Capital	1	5	0	0	1.83

Lemonade currently has a consensus target price of $32.67, indicating a potential downside of 1.99%. BlackRock TCP Capital has a consensus target price of $9.00, indicating a potential downside of 4.76%. Given Lemonade’s higher probable upside, analysts clearly believe Lemonade is more favorable than BlackRock TCP Capital.

Profitability

This table compares Lemonade and BlackRock TCP Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lemonade	-43.51%	-32.85%	-12.59%
BlackRock TCP Capital	-15.22%	14.16%	5.80%

Summary

Lemonade beats BlackRock TCP Capital on 8 of the 14 factors compared between the two stocks.

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 BlackRock TCP Capital

BlackRock TCP Capital Corp. is a business development company specializing in direct equity and debt investments in middle-market, small businesses, debt securities, senior secured loans, junior loans, originated loans, mezzanine, senior debt instruments, bonds, and secondary-market investments. It typically invests in communication services, public relations services, television, wireless telecommunication services, apparel, textile mills, restaurants, retailing, energy, oil and gas extraction, Patent owners and Lessors, Federal and Federally- Sponsored Credit agencies, insurance, hospital and healthcare centers, Biotechnology, engineering services, heavy electrical equipment, tax accounting, scientific and related consulting services, charter freight air transportation, Information technology consulting, application hosting services, software diagram and design, computer aided design, communication equipment, electronics manufacturing equipment, computer components, chemicals. It seeks to invest in the United States. The fund typically invests between $10 million and $35 million in companies with enterprise values between $100 million and $1500 million including complex situations. It prefers to make equity investments in companies for an ownership stake.