Genworth Financial (GNW) versus Primerica (PRI) Critical Survey
Genworth Financial (NYSE: GNW) and Primerica (NYSE:PRI) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, risk, valuation, earnings and profitability.
Earnings and Valuation
This table compares Genworth Financial and Primerica’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Genworth Financial||$8.74 billion||0.22||$852.00 million||($0.30)||-12.77|
|Primerica||$1.62 billion||2.43||$411.75 million||$4.90||17.88|
Genworth Financial has higher revenue and earnings than Primerica. Genworth Financial is trading at a lower price-to-earnings ratio than Primerica, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Genworth Financial has a beta of 2.7, suggesting that its stock price is 170% more volatile than the S&P 500. Comparatively, Primerica has a beta of 1.17, suggesting that its stock price is 17% more volatile than the S&P 500.
This table compares Genworth Financial and Primerica’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Primerica pays an annual dividend of $0.80 per share and has a dividend yield of 0.9%. Genworth Financial does not pay a dividend. Primerica pays out 16.3% of its earnings in the form of a dividend. Genworth Financial has raised its dividend for 6 consecutive years.
Insider and Institutional Ownership
67.6% of Genworth Financial shares are owned by institutional investors. Comparatively, 94.8% of Primerica shares are owned by institutional investors. 0.3% of Genworth Financial shares are owned by company insiders. Comparatively, 0.9% of Primerica shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
This is a breakdown of recent ratings and recommmendations for Genworth Financial and Primerica, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Genworth Financial presently has a consensus price target of $4.36, suggesting a potential upside of 13.93%. Primerica has a consensus price target of $86.00, suggesting a potential downside of 1.83%. Given Genworth Financial’s stronger consensus rating and higher probable upside, research analysts plainly believe Genworth Financial is more favorable than Primerica.
About Genworth Financial
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.
Primerica Inc. (Primerica) is a distributor of financial products to middle-income households in the United States and Canada. The Company operates through three segments: Term Life Insurance, Investment and Savings Products, and Corporate and Other Distributed Products. The Term Life Insurance segment includes underwriting profits on its in-force book of term life insurance policies, net of reinsurance, which are underwritten by its life insurance company subsidiaries. The Investment and Savings Products segment includes retail and managed mutual funds, and annuities distributed through licensed broker-dealer subsidiaries and includes segregated funds, an individual annuity savings product that it underwrites in Canada through Primerica Life Insurance Company of Canada (Primerica Life Canada). In the United States, it distributes mutual fund and annuity products of various third-party companies. It also earns fees for account servicing on a subset of the mutual funds it distributes.
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