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

Profitability

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

Net Margins Return on Equity Return on Assets
Genworth Financial 9.32% 4.85% 0.70%
GWG -38.85% -87.97% 4.35%

Earnings and Valuation

This table compares Genworth Financial and GWG’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Genworth Financial $8.30 billion 0.27 $817.00 million $1.39 3.26
GWG $64.13 million 0.59 -$20.63 million $3.16 2.05

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

Analyst Recommendations

This is a summary of current recommendations and price targets for Genworth Financial and GWG, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Genworth Financial 0 3 1 0 2.25
GWG 0 0 1 0 3.00

Genworth Financial presently has a consensus target price of $4.50, suggesting a potential downside of 0.66%. GWG has a consensus target price of $14.00, suggesting a potential upside of 115.95%. Given GWG’s stronger consensus rating and higher probable upside, analysts clearly believe GWG is more favorable than Genworth Financial.

Risk & Volatility

Genworth Financial has a beta of 2.4, indicating that its share price is 140% more volatile than the S&P 500. Comparatively, GWG has a beta of 0.7, indicating that its share price is 30% less volatile than the S&P 500.

Insider & Institutional Ownership

63.3% of Genworth Financial shares are held by institutional investors. Comparatively, 0.3% of GWG shares are held by institutional investors. 0.3% of Genworth Financial shares are held by company insiders. Comparatively, 77.4% of GWG shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

Genworth Financial beats GWG on 7 of the 13 factors compared between the two stocks.

About Genworth Financial

Genworth Financial, Inc. provides insurance and homeownership solutions in the United States and internationally. It operates through five segments: U.S. Mortgage Insurance, Canada Mortgage Insurance, Australia Mortgage Insurance, U.S. Life Insurance, and Runoff. The U.S. Mortgage Insurance segment offers mortgage insurance products primarily insuring prime-based, individually underwritten residential mortgage loans. The Canada Mortgage Insurance segment provides flow mortgage insurance; and bulk mortgage insurance products and services that aid in the sale of mortgages to the capital markets, as well as helps lenders manage capital and risk in Canada. The Australia Mortgage Insurance segment offers flow mortgage insurance and bulk mortgage insurance that aids in the sale of mortgages to the capital markets and helps lenders manage capital and risk. The U.S. Life Insurance segment offers long-term care insurance products and fixed annuity products in the United States. The Runoff segment covers non-strategic products, which primarily include variable annuity, variable life insurance, institutional, corporate-owned life insurance, and accident and health insurance products. This segment's institutional products include funding agreements, funding agreements backing notes, and guaranteed investment contracts. It distributes its products and services primarily through appointed independent producers and employer groups. Genworth Financial, Inc. was founded in 2003 and is headquartered in Richmond, Virginia.

About GWG

GWG Holdings, Inc., a financial services company, purchases life insurance policies in the secondary market in the United States. It purchases or finances life insurance assets from consumers in the secondary market at a discount to the face value of the policy benefit. The company also purchases policies in the secondary market through financial advisors and appointed agents. In addition, it focuses on applying proprietary M-Panel epigenetic technology to disrupt traditional life insurance underwriting practices. Further, it provides secured loans to merchant cash advance funders, as well as merchant cash advances directly to small businesses. GWG Holdings, Inc. was founded in 2006 and is headquartered in Minneapolis, Minnesota.

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