Contrasting Prudential Financial (PRU) and Genworth Financial (GNW)

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Prudential Financial (NYSE: PRU) and Genworth Financial (NYSE:GNW) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, valuation, analyst recommendations and dividends.

Institutional and Insider Ownership

64.4% of Prudential Financial shares are owned by institutional investors. Comparatively, 65.4% of Genworth Financial shares are owned by institutional investors. 0.6% of Prudential Financial shares are owned by insiders. Comparatively, 0.3% of Genworth Financial shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

Prudential Financial pays an annual dividend of $3.60 per share and has a dividend yield of 3.8%. Genworth Financial does not pay a dividend. Prudential Financial pays out 34.0% of its earnings in the form of a dividend. Prudential Financial has increased its dividend for 9 consecutive years.

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Prudential Financial $53.65 billion 0.74 $7.86 billion $10.58 8.95
Genworth Financial $8.30 billion 0.28 $817.00 million $1.39 3.28

Prudential Financial has higher revenue and earnings than Genworth Financial. Genworth Financial is trading at a lower price-to-earnings ratio than Prudential Financial, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Prudential Financial has a beta of 1.5, indicating that its stock price is 50% more volatile than the S&P 500. Comparatively, Genworth Financial has a beta of 2.46, indicating that its stock price is 146% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for Prudential Financial and Genworth Financial, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Prudential Financial 0 4 10 0 2.71
Genworth Financial 0 3 1 0 2.25

Prudential Financial currently has a consensus price target of $115.09, suggesting a potential upside of 21.56%. Genworth Financial has a consensus price target of $4.50, suggesting a potential downside of 1.32%. Given Prudential Financial’s stronger consensus rating and higher possible upside, equities analysts clearly believe Prudential Financial is more favorable than Genworth Financial.

Profitability

This table compares Prudential Financial and Genworth Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Prudential Financial 13.57% 9.25% 0.58%
Genworth Financial 9.39% 4.50% 0.65%

Summary

Prudential Financial beats Genworth Financial on 13 of the 17 factors compared between the two stocks.

Prudential Financial Company Profile

Prudential Financial, Inc., through its subsidiaries, provides insurance, investment management, and other financial products and services in the United States and internationally. It operates through U.S. Individual Solutions, U.S. Workplace Solutions, Investment Management, and International Insurance divisions. The U.S. Individual Solutions division offers individual variable and fixed annuity products to the mass affluent and affluent markets. It also provides universal, term, variable, and other life insurance products to the mass middle, mass affluent, and affluent markets. The U.S. Workplace Solutions division provides recordkeeping, plan administration, actuarial advisory, tailored participant education and communication, trustee, institutional and retail investment, and brokerage services, as well as institutional investment products to the payout annuity and stable value markets. It also provides group life; long-term and short-term group disability; and group corporate-, bank-, and trust-owned life insurance to institutional clients for employee plans and affinity groups, as well as accidental death, dismemberment, other ancillary coverage, and plan administrative services. The Investment Management division offers asset management services, such as institutional portfolio and retail funds management, private lending and asset securitization, and other structured products for public and private fixed income, public equity, and real estate, as well as commercial mortgage origination and servicing, mutual funds, and other retail services. The International Insurance division provides individual and group life insurance, retirement, and related products, as well as reinsurance products. The company offers its products and services to individual and institutional customers through its proprietary and third-party distribution networks. Prudential Financial, Inc. was founded in 1875 and is headquartered in Newark, New Jersey.

Genworth Financial Company Profile

Genworth Financial, Inc. provides insurance and homeownership solutions in the United States and internationally. It operates through five segments: U.S. Mortgage Insurance, Canada Mortgage Insurance, Australia Mortgage Insurance, U.S. Life Insurance, and Runoff. The U.S. Mortgage Insurance segment offers mortgage insurance products primarily insuring prime-based, individually underwritten residential mortgage loans. The Canada Mortgage Insurance segment provides flow mortgage insurance; and bulk mortgage insurance products and services that aid in the sale of mortgages to the capital markets, as well as helps lenders manage capital and risk in Canada. The Australia Mortgage Insurance segment offers flow mortgage insurance and bulk mortgage insurance that aids in the sale of mortgages to the capital markets and helps lenders manage capital and risk. The U.S. Life Insurance segment offers long-term care insurance products and fixed annuity products in the United States. The Runoff segment covers non-strategic products, which primarily include variable annuity, variable life insurance, institutional, corporate-owned life insurance, and accident and health insurance products. This segment's institutional products include funding agreements, funding agreements backing notes, and guaranteed investment contracts. It distributes its products and services primarily through appointed independent producers and employer groups. Genworth Financial, Inc. was founded in 2003 and is headquartered in Richmond, Virginia.

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