Analyzing Horace Mann Educators (NYSE:HMN) and Principal Financial Group (NASDAQ:PFG)

Horace Mann Educators (NYSE:HMN) and Principal Financial Group (NASDAQ:PFG) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, earnings, dividends, risk, analyst recommendations, valuation and institutional ownership.

Dividends

Horace Mann Educators pays an annual dividend of $1.40 per share and has a dividend yield of 2.9%. Principal Financial Group pays an annual dividend of $3.12 per share and has a dividend yield of 3.8%. Horace Mann Educators pays out 41.4% of its earnings in the form of a dividend. Principal Financial Group pays out 62.8% 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. Horace Mann Educators has increased its dividend for 17 consecutive years and Principal Financial Group has increased its dividend for 2 consecutive years.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Horace Mann Educators and Principal Financial Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Horace Mann Educators	0	3	1	1	2.60
Principal Financial Group	0	0	0	0	0.00

Horace Mann Educators currently has a consensus price target of $46.75, suggesting a potential downside of 1.66%. Given Horace Mann Educators’ stronger consensus rating and higher probable upside, equities analysts plainly believe Horace Mann Educators is more favorable than Principal Financial Group.

Insider & Institutional Ownership

99.3% of Horace Mann Educators shares are owned by institutional investors. Comparatively, 75.1% of Principal Financial Group shares are owned by institutional investors. 4.0% of Horace Mann Educators shares are owned by insiders. Comparatively, 1.1% of Principal Financial Group shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Horace Mann Educators and Principal Financial Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Horace Mann Educators	8.49%	14.23%	1.29%
Principal Financial Group	7.53%	15.63%	0.55%

Volatility & Risk

Horace Mann Educators has a beta of 0.27, indicating that its share price is 73% less volatile than the S&P 500. Comparatively, Principal Financial Group has a beta of 1.03, indicating that its share price is 3% more volatile than the S&P 500.

Valuation and Earnings

This table compares Horace Mann Educators and Principal Financial Group”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Horace Mann Educators	$1.58 billion	1.22	$102.80 million	$3.38	14.07
Principal Financial Group	$16.13 billion	1.14	$1.57 billion	$4.97	16.64

Principal Financial Group has higher revenue and earnings than Horace Mann Educators. Horace Mann Educators 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.

Summary

Horace Mann Educators beats Principal Financial Group on 11 of the 18 factors compared between the two stocks.

About Horace Mann Educators

Horace Mann Educators Corporation, together with its subsidiaries, operates as an insurance holding company in the United States. The company operates through Property & Casualty, Life & Retirement, and Supplemental & Group Benefits segments. Its Property & Casualty segment offers insurance products, including private passenger auto insurance, residential home insurance, and personal umbrella insurance; and provides auto coverages including liability and collision, and property coverage for homeowners and renters. The Life & Retirement segment markets tax-qualified fixed, fixed indexed, and variable annuities; and internal revenue code for educator, which allows public school employees and employees of other tax-exempt organizations, such as not-for-profit private schools, to utilize pretax income to make periodic contributions to a qualified retirement plan. The Supplemental & Group Benefits segment offers employer-sponsored products including accident, critical illness, limited-benefit fixed indemnity insurance, term life, and short-term and long-term disability, as well as worksite direct products, such as supplemental heart, cancer, disability, and accident coverage. The company was founded in 1945 and is headquartered in Springfield, Illinois.

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 a portfolio of asset accumulation products and services for retirement savings and income. It offers products and services for defined contribution plans, including 401(k) and 403(b) plans, defined benefit pension 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. 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, India, 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.