Genworth Financial (GNW) & Assurant (AIZ) Critical Contrast

Genworth Financial (NYSE: GNW) and Assurant (NYSE:AIZ) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, profitability, earnings, analyst recommendations, institutional ownership, risk and valuation.

Insider and Institutional Ownership

66.8% of Genworth Financial shares are owned by institutional investors. Comparatively, 90.5% of Assurant shares are owned by institutional investors. 0.3% of Genworth Financial shares are owned by insiders. Comparatively, 0.8% of Assurant shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Genworth Financial and Assurant’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Genworth Financial $8.37 billion 0.20 -$277.00 million $0.67 5.09
Assurant $7.53 billion 0.71 $565.35 million $4.18 23.87

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

Profitability

This table compares Genworth Financial and Assurant’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Genworth Financial 3.88% 1.57% 0.22%
Assurant 3.67% 3.55% 0.48%

Dividends

Assurant pays an annual dividend of $2.24 per share and has a dividend yield of 2.2%. Genworth Financial does not pay a dividend. Assurant pays out 53.6% of its earnings in the form of a dividend. Assurant has raised its dividend for 13 consecutive years.

Volatility and Risk

Genworth Financial has a beta of 2.8, indicating that its share price is 180% more volatile than the S&P 500. Comparatively, Assurant has a beta of 0.78, indicating that its share price is 22% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations for Genworth Financial and Assurant, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Genworth Financial 0 3 1 0 2.25
Assurant 1 0 1 0 2.00

Genworth Financial currently has a consensus target price of $3.88, suggesting a potential upside of 13.64%. Assurant has a consensus target price of $115.00, suggesting a potential upside of 15.27%. Given Assurant’s higher possible upside, analysts plainly believe Assurant is more favorable than Genworth Financial.

Summary

Assurant beats Genworth Financial on 11 of the 16 factors compared between the two stocks.

Genworth Financial Company Profile

Genworth Financial, Inc. (Genworth) is a financial security company. The Company provides insurance, wealth management, investment and financial solutions. As of December 31, 2011, the Company had more than 15 million customers, with a presence in more than 25 countries. The Company operates in Insurance, Mortgage Insurance and Corporate and Runoff. The Mortgage Insurance Division includes the business segments, such as International Mortgage Insurance and U.S. Mortgage Insurance. The Corporate and Runoff Division includes the Runoff segment and Corporate and Other activities. In September 2013, Genworth Financial, Inc closed the sale of its Wealth Management business, including Genworth Financial Wealth Management and alternative solutions provider, the Altegris companies, to a partnership of Aquiline Capital Partners and Genstar Capital.

Assurant Company Profile

Assurant, Inc. is a provider of risk management solutions in the housing and lifestyle markets. The Company operates in North America, Latin America, Europe and Asia. The Company’s segments include Global Housing, Global Lifestyle and Global Preneed. Through its Global Housing segment, it provides lender-placed homeowners, manufactured housing and flood insurance; renters insurance and related products (multi-family housing business), and field services, valuation services and other property risk management services (mortgage solutions business). Through its Global Lifestyle segment, it provides mobile device protection products and related services and extended service products and related services for consumer electronics and appliances (global connected living business); vehicle protection services, and credit insurance. The Global Preneed segment provides pre-funded funeral insurance and annuity products. Its Global Preneed Segment operates in the United States and Canada.

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