Analyzing Waterdrop (NYSE:WDH) & Prudential Financial (NYSE:PRU)

Waterdrop (NYSE:WDH) and Prudential Financial (NYSE:PRU) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their dividends, valuation, analyst recommendations, institutional ownership, risk, profitability and earnings.

Volatility and Risk

Waterdrop has a beta of -0.25, indicating that its stock price is 125% less volatile than the S&P 500. Comparatively, Prudential Financial has a beta of 0.97, indicating that its stock price is 3% less volatile than the S&P 500.

Institutional & Insider Ownership

2.0% of Waterdrop shares are held by institutional investors. Comparatively, 56.8% of Prudential Financial shares are held by institutional investors. 24.6% of Waterdrop shares are held by insiders. Comparatively, 0.3% of Prudential Financial shares are held 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.

Dividends

Waterdrop pays an annual dividend of $0.05 per share and has a dividend yield of 2.7%. Prudential Financial pays an annual dividend of $5.40 per share and has a dividend yield of 4.8%. Waterdrop pays out 26.3% of its earnings in the form of a dividend. Prudential Financial pays out 74.2% 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. Prudential Financial has increased its dividend for 2 consecutive years. Prudential Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of current ratings for Waterdrop and Prudential Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Waterdrop	0	2	0	0	2.00
Prudential Financial	1	11	0	0	1.92

Waterdrop currently has a consensus price target of $2.00, indicating a potential upside of 6.67%. Prudential Financial has a consensus price target of $118.00, indicating a potential upside of 3.82%. Given Waterdrop’s stronger consensus rating and higher possible upside, equities analysts plainly believe Waterdrop is more favorable than Prudential Financial.

Profitability

This table compares Waterdrop and Prudential Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Waterdrop	15.58%	9.99%	7.57%
Prudential Financial	4.65%	16.60%	0.67%

Valuation & Earnings

This table compares Waterdrop and Prudential Financial”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Waterdrop	$379.74 million	1.79	$50.35 million	$0.19	9.87
Prudential Financial	$68.05 billion	0.58	$2.73 billion	$7.28	15.61

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

Summary

Prudential Financial beats Waterdrop on 9 of the 16 factors compared between the two stocks.

About Waterdrop

Waterdrop Inc., through its subsidiaries, provides online insurance brokerage services to match and connect users with related insurance products underwritten by insurance companies in the People's Republic of China. The company offers short-term health and long-term health and life insurance products and services. It also operates a medical crowdfunding platform. Waterdrop Inc. was founded in 2016 and is headquartered in Beijing, the People's Republic of China.

About Prudential Financial

Prudential Financial, Inc., together with its subsidiaries, provides insurance, investment management, and other financial products and services in the United States and internationally. It operates through PGIM, Retirement Strategies, Group Insurance, Individual Life, and International Businesses segments. The PGIM segment offers investment management services and solutions related to public fixed income, public equity, real estate debt and equity, private credit and other alternatives, and multi-asset class strategies to institutional and retail clients, as well as its general account. The Retirement Strategies segment provides a range of retirement investment, and income products and services to retirement plan sponsors in the public, private, and not-for-profit sectors; develops and distributes individual variable and fixed annuity products. The Group Insurance segment offers various group life, and long-term and short-term group disability, as well as group corporate-, bank-, and trust-owned life insurance in the United States primarily for institutional clients for use in connection with employee and membership benefits plans; sells accidental death and dismemberment, and other supplemental health solutions; and plan administration services in connection with its insurance coverages. The Individual Life segment develops and distributes variable life, universal life, and term life insurance products. The International Businesses segment develops and distributes life insurance, retirement products, investment products, and certain accident and health products; and advisory services. The company provides its products and services to individual and institutional customers through its proprietary and third-party distribution networks. Prudential Financial, Inc. was founded in 1875 and is headquartered in Newark, New Jersey.