Financial Analysis: Horace Mann Educators (NYSE:HMN) & MetLife (NYSE:MET)

MetLife (NYSE:MET) and Horace Mann Educators (NYSE:HMN) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, valuation, earnings, analyst recommendations, profitability, risk and dividends.

Profitability

This table compares MetLife and Horace Mann Educators’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MetLife	5.83%	19.88%	0.82%
Horace Mann Educators	8.49%	14.23%	1.29%

Valuation and Earnings

This table compares MetLife and Horace Mann Educators”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MetLife	$72.22 billion	0.74	$4.43 billion	$5.90	13.53
Horace Mann Educators	$1.58 billion	1.15	$102.80 million	$3.38	13.23

MetLife has higher revenue and earnings than Horace Mann Educators. Horace Mann Educators 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. Comparatively, 99.3% of Horace Mann Educators shares are held by institutional investors. 0.4% of MetLife shares are held by company insiders. Comparatively, 4.0% of Horace Mann Educators shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Risk and Volatility

MetLife has a beta of 0.86, indicating that its stock price is 14% less volatile than the S&P 500. Comparatively, Horace Mann Educators has a beta of 0.21, indicating that its stock price is 79% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for MetLife and Horace Mann Educators, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MetLife	0	2	10	1	2.92
Horace Mann Educators	0	3	2	1	2.67

MetLife presently has a consensus price target of $95.18, suggesting a potential upside of 19.20%. Horace Mann Educators has a consensus price target of $46.75, suggesting a potential upside of 4.53%. Given MetLife’s stronger consensus rating and higher possible upside, analysts clearly believe MetLife is more favorable than Horace Mann Educators.

Dividends

MetLife pays an annual dividend of $2.27 per share and has a dividend yield of 2.8%. Horace Mann Educators pays an annual dividend of $1.40 per share and has a dividend yield of 3.1%. MetLife pays out 38.5% of its earnings in the form of a dividend. Horace Mann Educators pays out 41.4% 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 Horace Mann Educators has increased its dividend for 17 consecutive years. Horace Mann Educators is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

MetLife beats Horace Mann Educators on 10 of the 17 factors compared between the two stocks.

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.

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.