Prudential Financial (NYSE:PRU) and FBL Financial Group (NYSE:FFG) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, dividends, institutional ownership, earnings, valuation, profitability and analyst recommendations.
Volatility and Risk
Prudential Financial has a beta of 1.69, indicating that its share price is 69% more volatile than the S&P 500. Comparatively, FBL Financial Group has a beta of 0.17, indicating that its share price is 83% less volatile than the S&P 500.
Valuation & Earnings
This table compares Prudential Financial and FBL Financial Group's gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
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Prudential Financial | $58.13 billion | 0.57 | $4.19 billion | $11.69 | 7.15 |
FBL Financial Group | $774.68 million | 1.79 | $126.21 million | $4.75 | 11.95 |
Prudential Financial has higher revenue and earnings than FBL Financial Group. Prudential Financial is trading at a lower price-to-earnings ratio than FBL Financial Group, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Prudential Financial and FBL Financial Group's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
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Prudential Financial | -0.25% | 6.13% | 0.44% |
FBL Financial Group | 10.92% | 6.64% | 0.94% |
Dividends
Prudential Financial pays an annual dividend of $4.40 per share and has a dividend yield of 5.3%. FBL Financial Group pays an annual dividend of $2.00 per share and has a dividend yield of 3.5%. Prudential Financial pays out 37.6% of its earnings in the form of a dividend. FBL Financial Group pays out 42.1% 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. Prudential Financial is clearly the better dividend stock, given its higher yield and lower payout ratio.
Analyst Recommendations
This is a summary of recent recommendations and price targets for Prudential Financial and FBL Financial Group, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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Prudential Financial | 0 | 10 | 3 | 0 | 2.23 |
FBL Financial Group | 0 | 1 | 1 | 0 | 2.50 |
Prudential Financial currently has a consensus target price of $76.0833, indicating a potential downside of 8.37%. FBL Financial Group has a consensus target price of $65.00, indicating a potential upside of 14.28%. Given FBL Financial Group's stronger consensus rating and higher probable upside, analysts clearly believe FBL Financial Group is more favorable than Prudential Financial.
Institutional and Insider Ownership
57.1% of Prudential Financial shares are owned by institutional investors. Comparatively, 27.9% of FBL Financial Group shares are owned by institutional investors. 0.3% of Prudential Financial shares are owned by company insiders. Comparatively, 0.3% of FBL Financial Group shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Summary
Prudential Financial beats FBL Financial Group on 9 of the 16 factors compared between the two stocks.