SelectQuote (NYSE:SLQT) vs. Prudential Financial (NYSE:PRU) Critical Analysis

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Prudential Financial	6.51%	16.68%	0.70%
SelectQuote	3.84%	19.70%	5.33%

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Prudential Financial and SelectQuote, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Prudential Financial	5	11	1	0	1.76
SelectQuote	2	1	0	1	2.00

Prudential Financial currently has a consensus target price of $109.31, indicating a potential downside of 9.54%. SelectQuote has a consensus target price of $3.00, indicating a potential upside of 482.52%. Given SelectQuote’s stronger consensus rating and higher probable upside, analysts clearly believe SelectQuote is more favorable than Prudential Financial.

Earnings and Valuation

This table compares Prudential Financial and SelectQuote”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Prudential Financial	$57.68 billion	0.72	$3.58 billion	$11.04	10.95
SelectQuote	$1.62 billion	0.06	$62.19 million	($0.08)	-6.44

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

Institutional & Insider Ownership

56.8% of Prudential Financial shares are held by institutional investors. Comparatively, 34.6% of SelectQuote shares are held by institutional investors. 0.1% of Prudential Financial shares are held by insiders. Comparatively, 13.1% of SelectQuote shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Volatility & Risk

Prudential Financial has a beta of 0.83, indicating that its share price is 17% less volatile than the S&P 500. Comparatively, SelectQuote has a beta of 1.7, indicating that its share price is 70% more volatile than the S&P 500.

Summary

Prudential Financial beats SelectQuote on 8 of the 15 factors compared between the two stocks.

About Prudential Financial

Prudential Financial, Inc., together with its subsidiaries, provides insurance, investment management, and other financial products and services in the United States and internationally. It operates through PGIM, Retirement Strategies, Group Insurance, Individual Life, and International Businesses segments. The PGIM segment offers investment management services and solutions related to public fixed income, public equity, real estate debt and equity, private credit and other alternatives, and multi-asset class strategies to institutional and retail clients, as well as its general account. The Retirement Strategies segment provides a range of retirement investment, and income products and services to retirement plan sponsors in the public, private, and not-for-profit sectors; develops and distributes individual variable and fixed annuity products. The Group Insurance segment offers various group life, and long-term and short-term group disability, as well as group corporate-, bank-, and trust-owned life insurance in the United States primarily for institutional clients for use in connection with employee and membership benefits plans; sells accidental death and dismemberment, and other supplemental health solutions; and plan administration services in connection with its insurance coverages. The Individual Life segment develops and distributes variable life, universal life, and term life insurance products. The International Businesses segment develops and distributes life insurance, retirement products, investment products, and certain accident and health products; and advisory services. The company provides 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.

About SelectQuote

SelectQuote, Inc. operates a technology-enabled, direct-to-consumer distribution platform that sells a range of insurance products and healthcare services in the United States. The company operates through three segments: Senior; Life; and Auto & Home. It distributes senior health policies, such as medicare advantage, medicare supplement, medicare part D, and other ancillary senior health insurance related products, including prescription drugs, dental, vision, and hearing plans; life insurance products, such as term life, final expense, and other ancillary products, including critical illness, accidental death, and juvenile insurance; homeowners, auto, dwelling fire, and other ancillary insurance products; and non-commercial auto and home property, and casualty policies. The company also provides SelectRx, an accredited patient-centered pharmacy home pharmacy, which offers essential prescription medications, OTC medications, customized medication packaging, medication therapy management, and long-term pharmacy care; and population health that helps members understand the benefits available under their health plans, and contracts with insurance carriers. SelectQuote, Inc. was incorporated in 1999 and is headquartered in Overland Park, Kansas.