Critical Review: Ping An Insurance Co. of China (OTCMKTS:PNGAY) and Waterdrop (NYSE:WDH)

Waterdrop (NYSE:WDH) and Ping An Insurance Co. of China (OTCMKTS:PNGAY) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, profitability, dividends, risk, valuation, earnings and institutional ownership.

Insider and Institutional Ownership

2.0% of Waterdrop shares are held by institutional investors. Comparatively, 0.0% of Ping An Insurance Co. of China shares are held by institutional investors. 24.6% of Waterdrop shares are held by insiders. Comparatively, 0.1% of Ping An Insurance Co. of China shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Waterdrop and Ping An Insurance Co. of China”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Waterdrop	$568.81 million	1.01	$81.36 million	$0.21	7.55
Ping An Insurance Co. of China	$158.64 billion	0.86	$18.75 billion	$2.05	7.28

Ping An Insurance Co. of China has higher revenue and earnings than Waterdrop. Ping An Insurance Co. of China is trading at a lower price-to-earnings ratio than Waterdrop, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Waterdrop has a beta of -0.28, meaning that its stock price is 128% less volatile than the S&P 500. Comparatively, Ping An Insurance Co. of China has a beta of 0.24, meaning that its stock price is 76% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Waterdrop and Ping An Insurance Co. of China, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Waterdrop	0	2	0	0	2.00
Ping An Insurance Co. of China	0	1	0	0	2.00

Waterdrop presently has a consensus target price of $2.00, suggesting a potential upside of 26.18%. Given Waterdrop’s higher probable upside, analysts clearly believe Waterdrop is more favorable than Ping An Insurance Co. of China.

Profitability

This table compares Waterdrop and Ping An Insurance Co. of China’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Waterdrop	14.28%	11.34%	8.53%
Ping An Insurance Co. of China	11.80%	10.00%	1.01%

Dividends

Waterdrop pays an annual dividend of $0.05 per share and has a dividend yield of 3.2%. Ping An Insurance Co. of China pays an annual dividend of $0.44 per share and has a dividend yield of 2.9%. Waterdrop pays out 23.8% of its earnings in the form of a dividend. Ping An Insurance Co. of China pays out 21.5% 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.

Summary

Waterdrop beats Ping An Insurance Co. of China on 9 of the 14 factors compared between the two stocks.

About Waterdrop

Waterdrop Inc., through its subsidiaries, provides online insurance brokerage services to match and connect users with related insurance products underwritten by insurance companies in the People's Republic of China. The company offers short-term health and long-term health and life insurance products and services. It also operates a medical crowdfunding platform. Waterdrop Inc. was founded in 2016 and is headquartered in Beijing, the People's Republic of China.

About Ping An Insurance Co. of China

Ping An Insurance (Group) Company of China, Ltd. provides financial products and services for insurance, banking, asset management, and technology businesses in the People's Republic of China. The company operates through Life and Health Insurance; Property and Casualty Insurance; Banking; Asset Management; and Technology segments. Its Life and Health Insurance segment offers term, whole-life, endowment, annuity, investment-linked, universal life, and health care and medical insurance to individual and corporate customers. The company's Property and Casualty Insurance segment provides auto, non-auto, and accident and health insurance to individual and corporate customers. Its Banking segment undertakes loan and intermediary businesses with corporate and retail customers; and offers wealth management and credit card services to individual customers. The company's Asset Management segment provides trust products services, brokerage services, trading services, investment banking services, investment management, finance lease, and other asset management services. Its Technology segment offers financial and daily-life services through internet platforms, such as financial transaction information service, and health care service platforms. The company also provides annuity insurance, IT and business process outsourcing, real estate investment and management, futures brokerage, project investment, currency brokerage, property agency, fund raising and distribution, real estate development and leasing, and insurance agency services. In addition, it provides factoring, equity investment, logistics and warehousing, management consulting, e-commerce, and credit information services; and operates an expressway, as well as produces and sells consumer chemicals. The company was incorporated in 1988 and is based in Shenzhen, China.