Financial Review: Trupanion (NASDAQ:TRUP) vs. Aflac (NYSE:AFL)

Aflac (NYSE:AFL) and Trupanion (NASDAQ:TRUP) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their risk, valuation, dividends, analyst recommendations, profitability, institutional ownership and earnings.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Aflac and Trupanion, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Aflac	2	8	3	0	2.08
Trupanion	0	3	3	0	2.50

Aflac presently has a consensus price target of $108.5385, indicating a potential upside of 3.03%. Trupanion has a consensus price target of $54.1667, indicating a potential upside of 11.43%. Given Trupanion’s stronger consensus rating and higher possible upside, analysts clearly believe Trupanion is more favorable than Aflac.

Insider & Institutional Ownership

67.4% of Aflac shares are owned by institutional investors. 0.9% of Aflac shares are owned by company insiders. Comparatively, 5.4% of Trupanion shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Aflac	$18.93 billion	2.98	$5.44 billion	$4.41	23.89
Trupanion	$1.29 billion	1.63	-$9.63 million	$0.26	186.96

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

Volatility and Risk

Aflac has a beta of 0.83, suggesting that its share price is 17% less volatile than the S&P 500. Comparatively, Trupanion has a beta of 1.78, suggesting that its share price is 78% more volatile than the S&P 500.

Profitability

This table compares Aflac and Trupanion’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Aflac	15.32%	15.08%	3.21%
Trupanion	0.81%	3.31%	1.33%

Summary

Aflac beats Trupanion on 8 of the 13 factors compared between the two stocks.

About Aflac

Aflac Incorporated, through its subsidiaries, provides supplemental health and life insurance products. The company operates through Aflac Japan and Aflac U.S. segments. 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. Aflac Incorporated was founded in 1955 and is headquartered in Columbus, Georgia.

About Trupanion

Trupanion, Inc., together with its subsidiaries, provides medical insurance for cats and dogs on a monthly subscription basis in the United States, Canada, Continental Europe, and Australia. The company operates in two segments, Subscription Business and Other Business. It serves pet owners and veterinarians. The company was formerly known as Vetinsurance International, Inc. changed its name to Trupanion, Inc. in 2013. Trupanion, Inc. was founded in 2000 and is headquartered in Seattle, Washington.