Aflac (NYSE:AFL – Get Free Report) and Principal Financial Group (NYSE:PFG – Get Free Report) are both large-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, profitability, dividends, earnings and risk.
This is a breakdown of recent ratings and recommmendations for Aflac and Principal Financial Group, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Principal Financial Group||5||8||0||0||1.62|
Aflac currently has a consensus target price of $76.00, indicating a potential upside of 1.59%. Principal Financial Group has a consensus target price of $76.46, indicating a potential upside of 1.43%. Given Aflac’s stronger consensus rating and higher probable upside, equities analysts clearly believe Aflac is more favorable than Principal Financial Group.
Earnings & Valuation
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Aflac||$19.03 billion||2.34||$4.20 billion||$7.48||10.00|
|Principal Financial Group||$17.49 billion||1.04||$4.81 billion||$6.47||11.65|
Principal Financial Group has lower revenue, but higher earnings than Aflac. Aflac is trading at a lower price-to-earnings ratio than Principal Financial Group, indicating that it is currently the more affordable of the two stocks.
This table compares Aflac and Principal Financial Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Principal Financial Group||11.52%||15.85%||0.54%|
Volatility & Risk
Aflac has a beta of 0.93, indicating that its stock price is 7% less volatile than the S&P 500. Comparatively, Principal Financial Group has a beta of 1.31, indicating that its stock price is 31% more volatile than the S&P 500.
Aflac pays an annual dividend of $1.68 per share and has a dividend yield of 2.2%. Principal Financial Group pays an annual dividend of $2.60 per share and has a dividend yield of 3.4%. Aflac pays out 22.5% of its earnings in the form of a dividend. Principal Financial Group pays out 40.2% 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. Aflac has increased its dividend for 40 consecutive years and Principal Financial Group has increased its dividend for 1 consecutive years.
Insider and Institutional Ownership
66.8% of Aflac shares are held by institutional investors. Comparatively, 70.7% of Principal Financial Group shares are held by institutional investors. 0.9% of Aflac shares are held by company insiders. Comparatively, 0.8% of Principal Financial Group shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Aflac beats Principal Financial Group on 12 of the 17 factors compared between the two stocks.
Aflac Incorporated, through its subsidiaries, provides supplemental health and life insurance products. It operates in two segments, Aflac Japan and Aflac U.S. The Aflac Japan segment offers cancer, medical, nursing care, work leave, GIFT, and whole and term life insurance products, as well as WAYS and child endowment plans under saving type insurance products in Japan. The Aflac U.S. segment provides cancer, accident, short-term disability, critical illness, hospital indemnity, dental, vision, long-term care and disability, and term and whole life insurance products in the United States. It sells its products through sales associates, brokers, independent corporate agencies, individual agencies, and affiliated corporate agencies. The company was founded in 1955 and is headquartered in Columbus, Georgia.
About Principal Financial Group
Principal Financial Group, Inc. provides retirement, asset management, and insurance products and services to businesses, individuals, and institutional clients worldwide. The company operates through Retirement and Income Solutions, Principal Global Investors, Principal International, and U.S. Insurance Solutions segments. The Retirement and Income Solutions segment provides retirement, and related financial products and services. It offers products and services for defined contribution plans, including 401(k) and 403(b) plans, defined benefit plans, nonqualified executive benefit plans, employee stock ownership plans, equity compensation, and pension risk transfer services; individual retirement accounts; investment only products; and mutual funds, individual variable annuities, and bank products, as well as trust and custody services. The Principal Global Investors segment provides equity, fixed income, real estate, and other alternative investments, as well as asset allocation, stable value management, and other structured investment strategies. The Principal International segment offers pension accumulation products and services, mutual funds, asset management, income annuities, and life insurance accumulation products, as well as voluntary savings plans in Brazil, Chile, Mexico, China, Hong Kong Special Administrative Region, and Southeast Asia. The U.S. Insurance Solutions segment provides specialty benefits, such as group dental and vision insurance, group life insurance, and group and individual disability insurance, as well as administers group dental, disability, and vision benefits; and individual life insurance products comprising universal, variable universal, indexed universal, and term life insurance products in the United States. It also offers insurance solutions for small and medium-sized businesses and their owners, as well as executives. Principal Financial Group, Inc. was founded in 1879 and is based in Des Moines, Iowa.
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