Critical Contrast: Athene (ATH) & GWG (GWGH)

Athene (NYSE: ATH) and GWG (NASDAQ:GWGH) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, valuation, dividends, institutional ownership, analyst recommendations, earnings and profitability.

Valuation and Earnings

This table compares Athene and GWG’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Athene $4.11 billion 2.30 $805.00 million $6.79 6.97
GWG $69.48 million 0.77 $390,000.00 ($3.49) -2.64

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

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Athene and GWG, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Athene 0 4 12 0 2.75
GWG 0 0 2 0 3.00

Athene presently has a consensus target price of $59.25, indicating a potential upside of 25.24%. GWG has a consensus target price of $14.50, indicating a potential upside of 57.61%. Given GWG’s stronger consensus rating and higher probable upside, analysts clearly believe GWG is more favorable than Athene.

Institutional & Insider Ownership

48.4% of Athene shares are held by institutional investors. Comparatively, 50.8% of GWG shares are held by institutional investors. 10.6% of Athene shares are held by company insiders. Comparatively, 77.4% of GWG shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares Athene and GWG’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Athene 22.66% 13.31% 1.15%
GWG -28.93% -121.72% 3.59%

Summary

Athene beats GWG on 8 of the 13 factors compared between the two stocks.

Athene Company Profile

Athene Holding Ltd. is an insurance holding company. The Company’s segments include Retirement Services, Corporate and Other. Retirement Services segment consists of the United States and Bermuda operations, which issue and reinsure retirement savings products and institutional products. Retirement Services has retail operations, which provide annuity retirement solutions to its policyholders. Retirement Services has reinsurance operations, which reinsure multi-year guaranteed annuities, fixed indexed annuities, traditional one year guarantee fixed deferred annuities, immediate annuities and institutional products from its reinsurance partners. It offers two product lines: annuities and funding agreements. It offers deferred and immediate annuities, which are focused on the needs and objectives of people preparing for, approaching or living in retirement. It focuses on issuing funding agreements to institutional investors. Its life and other products include other retail products.

GWG Company Profile

GWG Holdings, Inc. is the parent company of GWG Life, is a financial services company. The Company is focused on transforming the life insurance industry through its products and services. The Company has developed a new suite of options for the life insurance secondary market called LifeCare Xchange (LCX). This new capability provides seniors with the exchange value of their life insurance policies they can apply to long-term care and other post-retirement needs. Through its subsidiary GWG Life, LLC, seeks to further transform the industry by applying proprietary M-Panel epigenetic technology to disrupt traditional life insurance underwriting practices.

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