Critical Survey: Sompo (OTCMKTS:SMPNY) vs. MetLife (NYSE:MET)

Sompo (OTCMKTS:SMPNY) and MetLife (NYSE:MET) are both large-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, valuation, institutional ownership, risk, profitability, dividends and earnings.

Risk and Volatility

Sompo has a beta of 0.32, suggesting that its stock price is 68% less volatile than the S&P 500. Comparatively, MetLife has a beta of 0.78, suggesting that its stock price is 22% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and price targets for Sompo and MetLife, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sompo	0	0	0	0	0.00
MetLife	0	2	11	1	2.93

MetLife has a consensus target price of $95.31, indicating a potential upside of 7.46%. Given MetLife’s stronger consensus rating and higher possible upside, analysts clearly believe MetLife is more favorable than Sompo.

Valuation and Earnings

This table compares Sompo and MetLife”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sompo	$35.69 billion	1.01	$4.25 billion	$2.34	8.25
MetLife	$77.08 billion	0.74	$3.38 billion	$5.16	17.19

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

Institutional and Insider Ownership

95.0% of MetLife shares are held by institutional investors. 0.4% of MetLife shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Sompo and MetLife’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sompo	11.95%	13.42%	3.89%
MetLife	4.66%	22.60%	0.88%

Dividends

Sompo pays an annual dividend of $0.14 per share and has a dividend yield of 0.7%. MetLife pays an annual dividend of $2.37 per share and has a dividend yield of 2.7%. Sompo pays out 6.0% of its earnings in the form of a dividend. MetLife pays out 45.9% 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. MetLife has raised its dividend for 12 consecutive years. MetLife is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

MetLife beats Sompo on 13 of the 18 factors compared between the two stocks.

About Sompo

Sompo Holdings, Inc. provides property and casualty (P&C) insurance services in Japan and internationally. The company operates through Domestic P&C Insurance Business, Overseas Insurance Business, Domestic Life Insurance Business, and Nursing Care & Seniors Business segments. It offers various P&C insurance products, including automobile, fire, personal accident, and marine, as well as security, risk management, assistance, and warranty services; and life insurance products. The company also provides nursing care and seniors services; and customer security, health, and wellbeing support services. In addition, it offers asset management services; home remodeling services; and health support services comprising health guidance and employee assistance programs. The company was formerly known as Sompo Japan Nipponkoa Holdings, Inc. and changed its name to Sompo Holdings, Inc. in October 2016. The company was incorporated in 2010 and is headquartered in Tokyo, Japan.

About MetLife

MetLife, Inc., a financial services company, provides insurance, annuities, employee benefits, and asset management services worldwide. It operates through six segments: Retirement and Income Solutions; Group Benefits; Asia; Latin America; Europe, the Middle East and Africa; and MetLife Holdings. The company offers life, dental, group short-and long-term disability, individual disability, pet insurance, accidental death and dismemberment, vision, and accident and health coverages, as well as prepaid legal plans; administrative services-only arrangements to employers; and general and separate account, and synthetic guaranteed interest contracts, as well as private floating rate funding agreements. It also provides pension risk transfers, institutional income annuities, structured settlements, and capital markets investment products; and other products and services, such as life insurance products and funding agreements for funding postretirement benefits, as well as company, bank, or trust-owned life insurance used to finance nonqualified benefit programs for executives. In addition, it provides fixed, indexed-linked, and variable annuities; pension products; regular savings products; whole and term life, endowments, universal and variable life, and group life products; longevity reinsurance solutions; credit insurance products; and protection against long-term health care services. MetLife, Inc. was incorporated in 1999 and is based in New York, New York.