MetLife (NYSE:MET) & Manulife Financial (NYSE:MFC) Critical Review

Manulife Financial (NYSE:MFC) and MetLife (NYSE:MET) are both large-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, valuation, earnings, institutional ownership, risk, analyst recommendations and profitability.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Manulife Financial and MetLife, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Manulife Financial	0	2	3	2	3.00
MetLife	0	2	13	0	2.87

Manulife Financial currently has a consensus price target of $58.75, suggesting a potential upside of 36.75%. MetLife has a consensus price target of $105.44, suggesting a potential upside of 6.76%. Given Manulife Financial’s stronger consensus rating and higher probable upside, analysts plainly believe Manulife Financial is more favorable than MetLife.

Insider & Institutional Ownership

52.6% of Manulife Financial shares are held by institutional investors. Comparatively, 95.0% of MetLife shares are held by institutional investors. 0.0% of Manulife Financial shares are held by insiders. Comparatively, 0.4% of MetLife shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Volatility & Risk

Manulife Financial has a beta of 0.86, indicating that its stock price is 14% less volatile than the S&P 500. Comparatively, MetLife has a beta of 0.79, indicating that its stock price is 21% less volatile than the S&P 500.

Dividends

Manulife Financial pays an annual dividend of $1.38 per share and has a dividend yield of 3.2%. MetLife pays an annual dividend of $2.37 per share and has a dividend yield of 2.4%. Manulife Financial pays out 51.5% of its earnings in the form of a dividend. MetLife pays out 30.9% 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. Manulife Financial has increased its dividend for 12 consecutive years and MetLife has increased its dividend for 12 consecutive years.

Profitability

This table compares Manulife Financial and MetLife’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Manulife Financial	10.28%	16.90%	0.75%
MetLife	6.21%	24.45%	0.91%

Valuation and Earnings

This table compares Manulife Financial and MetLife”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Manulife Financial	$43.63 billion	1.63	$4.14 billion	$2.68	16.03
MetLife	$77.73 billion	0.82	$3.38 billion	$7.67	12.88

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

Summary

Manulife Financial beats MetLife on 9 of the 17 factors compared between the two stocks.

About Manulife Financial

Manulife Financial Corporation, together with its subsidiaries, provides financial products and services in the United States, Canada, Asia, and internationally. The company operates through Wealth and Asset Management Businesses; Insurance and Annuity Products; and Corporate and Other segments. The Wealth and Asset Management Businesses segment offers investment advice and solutions to retirement, retail, and institutional clients through multiple distribution channels, including agents and brokers affiliated with the company, independent securities brokerage firms and financial advisors pension plan consultants, and banks. The Insurance and Annuity Products segment provides deposit and credit products; and individual life insurance, individual and group long-term care insurance, and guaranteed and partially guaranteed annuity products through multiple distribution channels, including insurance agents, brokers, banks, financial planners, and direct marketing. The Corporate and Other segment is involved in the property and casualty reinsurance businesses; and run-off reinsurance operations, including variable annuities, and accident and health. The company also manages timberland and agricultural portfolios; and engages in insurance agency, investment counseling and dealer, portfolio and mutual fund management, property and casualty insurance, and mutual fund dealer businesses. In addition, it provides integrated banking products and services. The company was incorporated in 1887 and is headquartered in Toronto, Canada.

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.