Contrasting Manulife Financial (NYSE:MFC) & MetLife (NYSE:MET)

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

Institutional & Insider Ownership

95.0% of MetLife shares are held by institutional investors. Comparatively, 52.6% of Manulife Financial shares are held by institutional investors. 0.4% of MetLife shares are held by company insiders. Comparatively, 0.0% of Manulife Financial shares are held by company 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.

Analyst Recommendations

This is a summary of current ratings and price targets for MetLife and Manulife Financial, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MetLife	0	1	14	0	2.93
Manulife Financial	0	2	3	2	3.00

MetLife currently has a consensus price target of $107.12, indicating a potential upside of 5.22%. Manulife Financial has a consensus price target of $58.75, indicating a potential upside of 33.78%. Given Manulife Financial’s stronger consensus rating and higher probable upside, analysts plainly believe Manulife Financial is more favorable than MetLife.

Earnings and Valuation

This table compares MetLife and Manulife Financial”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MetLife	$77.08 billion	0.83	$3.38 billion	$7.67	13.27
Manulife Financial	$43.63 billion	1.66	$4.14 billion	$2.53	17.36

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
MetLife	6.21%	25.71%	0.92%
Manulife Financial	10.28%	16.75%	0.75%

Risk & Volatility

MetLife has a beta of 0.79, meaning that its share price is 21% less volatile than the S&P 500. Comparatively, Manulife Financial has a beta of 0.86, meaning that its share price is 14% less volatile than the S&P 500.

Dividends

MetLife pays an annual dividend of $2.37 per share and has a dividend yield of 2.3%. Manulife Financial pays an annual dividend of $1.38 per share and has a dividend yield of 3.1%. MetLife pays out 30.9% of its earnings in the form of a dividend. Manulife Financial pays out 54.5% 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. MetLife has increased its dividend for 12 consecutive years and Manulife Financial has increased its dividend for 12 consecutive years.

Summary

Manulife Financial beats MetLife on 9 of the 17 factors compared between the two stocks.

About MetLife

MetLife, Inc. is a global financial services company best known for providing insurance, employee benefits and retirement-related products. Its offerings include life, dental and disability insurance, annuities, and products and services designed to help individuals and employers plan for financial protection and retirement. The company serves individuals, businesses and institutions in the United States and international markets, including countries in Latin America, Asia, Europe and the Middle East.

About Manulife Financial

Manulife Financial Corporation is a Canadian financial services company that provides insurance, wealth management and investment services to individuals and businesses. Its offerings include life and health insurance, group benefits, retirement solutions and investment products. Founded in 1887 as The Manufacturers Life Insurance Company, Manulife serves customers in Canada, the United States and Asia. In the United States, it operates primarily under the John Hancock name. The company also provides asset management services to institutional and retail clients through Manulife Investment Management, which offers investment strategies across a range of asset classes.