Lemonade vs Root Which Performs Better?

Lemonade and root stocks are two popular investment options that cater to different risk appetites and goals. Lemonade, a digital insurance company, offers a simplistic approach to buying insurance with its hassle-free online platform. On the other hand, root stocks are traditional investments in stable and established companies that provide consistent dividends and potentially long-term growth. Both options have their pros and cons, and the choice between the two ultimately depends on individual preferences and financial objectives.

Lemonade or Root?

When comparing Lemonade and Root, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Lemonade and Root.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Lemonade has a dividend yield of -%, while Root has a dividend yield of -%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Lemonade reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%. On the other hand, Root reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Lemonade P/E ratio at -15.59 and Root's P/E ratio at -89.89. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Lemonade P/B ratio is 5.64 while Root's P/B ratio is 8.05.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Lemonade has seen a 5-year revenue growth of 10.96%, while Root's is 7.30%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Lemonade's ROE at -32.84% and Root's ROE at -7.34%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $46.28 for Lemonade and $92.81 for Root. Over the past year, Lemonade's prices ranged from $14.03 to $53.85, with a yearly change of 283.82%. Root's prices fluctuated between $7.22 and $118.15, with a yearly change of 1536.43%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.