MetLife (NYSE:MET) vs. James River Group (NASDAQ:JRVR) Critical Analysis

MetLife (NYSE:MET) and James River Group (NASDAQ:JRVR) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, risk, institutional ownership, valuation, dividends, earnings and profitability.

Risk & Volatility

MetLife has a beta of 0.78, indicating that its stock price is 22% less volatile than the S&P 500. Comparatively, James River Group has a beta of -0.03, indicating that its stock price is 103% less volatile than the S&P 500.

Dividends

MetLife pays an annual dividend of $2.37 per share and has a dividend yield of 2.9%. James River Group pays an annual dividend of $0.04 per share and has a dividend yield of 1.0%. MetLife pays out 45.9% of its earnings in the form of a dividend. James River Group pays out 11.8% 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. MetLife has raised its dividend for 12 consecutive years. MetLife is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares MetLife and James River Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MetLife	4.66%	22.60%	0.88%
James River Group	4.34%	10.79%	1.13%

Valuation & Earnings

This table compares MetLife and James River Group”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MetLife	$77.08 billion	0.69	$3.38 billion	$5.16	15.97
James River Group	$687.61 million	0.27	$47.43 million	$0.34	11.93

MetLife has higher revenue and earnings than James River Group. James River Group is trading at a lower price-to-earnings ratio than MetLife, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

95.0% of MetLife shares are held by institutional investors. Comparatively, 95.2% of James River Group shares are held by institutional investors. 0.4% of MetLife shares are held by company insiders. Comparatively, 33.8% of James River Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings and target prices for MetLife and James River Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MetLife	0	2	11	1	2.93
James River Group	2	5	0	0	1.71

MetLife presently has a consensus target price of $95.31, suggesting a potential upside of 15.67%. James River Group has a consensus target price of $6.44, suggesting a potential upside of 58.75%. Given James River Group’s higher possible upside, analysts clearly believe James River Group is more favorable than MetLife.

Summary

MetLife beats James River Group on 13 of the 18 factors compared between the two stocks.

About MetLife

MetLife, Inc., a financial services company, provides insurance, annuities, employee benefits, and asset management services worldwide. It operates through six segments: Retirement and Income Solutions; Group Benefits; Asia; Latin America; Europe, the Middle East and Africa; and MetLife Holdings. The company offers life, dental, group short-and long-term disability, individual disability, pet insurance, accidental death and dismemberment, vision, and accident and health coverages, as well as prepaid legal plans; administrative services-only arrangements to employers; and general and separate account, and synthetic guaranteed interest contracts, as well as private floating rate funding agreements. It also provides pension risk transfers, institutional income annuities, structured settlements, and capital markets investment products; and other products and services, such as life insurance products and funding agreements for funding postretirement benefits, as well as company, bank, or trust-owned life insurance used to finance nonqualified benefit programs for executives. In addition, it provides fixed, indexed-linked, and variable annuities; pension products; regular savings products; whole and term life, endowments, universal and variable life, and group life products; longevity reinsurance solutions; credit insurance products; and protection against long-term health care services. MetLife, Inc. was incorporated in 1999 and is based in New York, New York.

About James River Group

James River Group Holdings, Ltd., through its subsidiaries, provides specialty insurance services. It operates through Excess and Surplus Lines, and Specialty Admitted Insurance segments. The Excess and Surplus Lines segment underwrites liability and property insurance in the United States Puerto Rice, and the United States Virgin Islands. This segment distributes its insurance policies primarily through wholesale insurance brokers. The Specialty Admitted Insurance segment provides insurance for fronting, program administrators, managing general agents, and independent retail agents. James River Group Holdings, Ltd. was founded in 2002 and is headquartered in Pembroke, Bermuda.