Financial Review: Prudential Public (NYSE:PUK) and Globe Life (NYSE:GL)

Prudential Public (NYSE:PUK) and Globe Life (NYSE:GL) are both large-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their analyst recommendations, risk, profitability, dividends, valuation, institutional ownership and earnings.

Dividends

Prudential Public pays an annual dividend of $0.81 per share and has a dividend yield of 2.0%. Globe Life pays an annual dividend of $0.69 per share and has a dividend yield of 0.7%. Prudential Public pays out 16.4% of its earnings in the form of a dividend. Globe Life pays out 11.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Prudential Public and Globe Life, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Prudential Public 1 1 3 0 2.40
Globe Life 1 0 1 0 2.00

Globe Life has a consensus price target of $99.00, suggesting a potential upside of 3.20%. Given Globe Life’s higher probable upside, analysts clearly believe Globe Life is more favorable than Prudential Public.

Volatility and Risk

Prudential Public has a beta of 1.47, meaning that its share price is 47% more volatile than the S&P 500. Comparatively, Globe Life has a beta of 0.95, meaning that its share price is 5% less volatile than the S&P 500.

Insider and Institutional Ownership

2.0% of Prudential Public shares are owned by institutional investors. Comparatively, 75.6% of Globe Life shares are owned by institutional investors. 3.6% of Globe Life shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Prudential Public and Globe Life’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Prudential Public N/A N/A N/A
Globe Life 16.26% 12.34% 3.06%

Earnings & Valuation

This table compares Prudential Public and Globe Life’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Prudential Public $32.89 billion 1.61 $4.02 billion $4.94 8.24
Globe Life $4.30 billion 2.43 $701.47 million $6.13 15.65

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

Summary

Globe Life beats Prudential Public on 10 of the 16 factors compared between the two stocks.

About Prudential Public

Prudential plc, through its subsidiaries, provides a range of retail financial products and services, and asset management services in Asia, the United States, the United Kingdom, Europe, and Africa. The company offers health and protection, as well as other life insurance products, including participating business; mutual funds; and personal lines property and casualty insurance, group insurance, and institutional fund management services. It also provides fixed annuities, such as fixed interest rate, and fixed index and immediate annuities; variable annuities; institutional products comprising guaranteed investment contracts and funding agreements; and savings and investment products. In addition, the company offers long-term products, which include pension products and annuities; conventional annuities, including level, fixed increase, and RPI annuities; onshore and offshore bonds; corporate, individual pension, and income drawdown products; and investment funds. Prudential plc provides its products and services through an agency sales force together with various banks, brokers, local partners, independent insurance agents, independent broker-dealers, regional broker-dealers, wirehouses, credit unions, and other financial institutions. The company was founded in 1848 and is based in London, the United Kingdom.

About Globe Life

Globe Life Inc., through its subsidiaries, provides various life and supplemental health insurance products, and annuities to lower middle to middle income households in the United States. The company operates through four segments: Life Insurance, Supplemental Health Insurance, Annuities, and Investments. It offers term life, whole life, children's life, senior life, and family life insurance products; accidental benefits insurance; mortgage protection insurance; and medicare supplement plans. The company was formerly known as Torchmark Corporation and changed its name to Globe Life Inc. in August 2019. Globe Life Inc. is based in McKinney, Texas.

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