Critical Contrast: Manulife Financial Corp (MFC) versus Aegon NV (AEG)
Aegon NV (NYSE: AEG) and Manulife Financial Corp (NYSE:MFC) are both mid-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, institutional ownership, profitabiliy, risk, valuation and earnings.
Volatility & Risk
Aegon NV has a beta of 1.4, suggesting that its stock price is 40% more volatile than the S&P 500. Comparatively, Manulife Financial Corp has a beta of 1.27, suggesting that its stock price is 27% more volatile than the S&P 500.
Institutional & Insider Ownership
10.3% of Aegon NV shares are owned by institutional investors. Comparatively, 48.6% of Manulife Financial Corp shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
This is a breakdown of recent recommendations and price targets for Aegon NV and Manulife Financial Corp, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Manulife Financial Corp||0||3||6||0||2.67|
Aegon NV currently has a consensus target price of $5.00, indicating a potential upside of 2.67%. Manulife Financial Corp has a consensus target price of $22.00, indicating a potential upside of 23.53%. Given Manulife Financial Corp’s stronger consensus rating and higher probable upside, analysts clearly believe Manulife Financial Corp is more favorable than Aegon NV.
This table compares Aegon NV and Manulife Financial Corp’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Manulife Financial Corp||4.63%||10.56%||0.58%|
Aegon NV pays an annual dividend of $0.24 per share and has a dividend yield of 4.9%. Manulife Financial Corp pays an annual dividend of $0.60 per share and has a dividend yield of 3.4%. Aegon NV pays out 60.0% of its earnings in the form of a dividend. Manulife Financial Corp pays out 50.8% 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. Manulife Financial Corp has increased its dividend for 3 consecutive years.
Earnings and Valuation
This table compares Aegon NV and Manulife Financial Corp’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Aegon NV||$60.88 billion||0.16||$2.09 billion||$0.40||12.18|
|Manulife Financial Corp||$33.09 billion||1.06||$4.05 billion||$1.18||15.09|
Manulife Financial Corp has higher revenue, but lower earnings than Aegon NV. Aegon NV is trading at a lower price-to-earnings ratio than Manulife Financial Corp, indicating that it is currently the more affordable of the two stocks.
Manulife Financial Corp beats Aegon NV on 12 of the 16 factors compared between the two stocks.
About Aegon NV
Aegon N.V. (Aegon) is an international life insurance, pensions and asset management company. The Company’s segments include the Americas, which includes the United States, Mexico and Brazil; the Netherlands; the United Kingdom; Central & Eastern Europe; Spain & Portugal; Asia, and Aegon Asset Management. It offers protection against mortality, morbidity and longevity risks, including traditional and universal life. It offers products with mortality, morbidity, and longevity risks, including traditional and universal life; mortgages; annuity products, and banking products. It offers individual protection products, such as annuities, term insurance, income protection and international/offshore bonds. It has activities in the Czech Republic, Hungary, Poland, Romania, Slovakia and Turkey. It offers life insurance marketed to high-net-worth individuals in Hong Kong and Singapore. It also offers investment products covering third-party customers, insurance-linked solutions.
About Manulife Financial Corp
Manulife Financial Corporation (MFC) is a holding company of The Manufacturers Life Insurance Company (MLI), which is a life insurance company, and John Hancock Reassurance Company Ltd. (JHRECO), which is a reinsurance company. The Company operates as a financial services company with principal operations in Asia, Canada and the United States. The Company’s segments include Asia Division, Canadian Division, U.S. Division, and the Corporate and Other. The Company operates as Manulife in Canada and Asia and primarily as John Hancock in the United States. The product and service offerings under its Asia, Canadian and U.S. Divisions include Protection, Wealth and Asset Management, and Other Wealth. The Corporate and Other segment includes external asset management business, Property and Casualty (P&C) Reinsurance Business, and run-off reinsurance operations, including variable annuities, and accident and health.
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