Manulife Financial Corp (NYSE: MFC) and Lincoln National Corporation (NYSE:LNC) are both large-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, profitabiliy, valuation, dividends, analyst recommendations and risk.

Risk and Volatility

Manulife Financial Corp has a beta of 1.28, indicating that its stock price is 28% more volatile than the S&P 500. Comparatively, Lincoln National Corporation has a beta of 1.98, indicating that its stock price is 98% more volatile than the S&P 500.

Profitability

This table compares Manulife Financial Corp and Lincoln National Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Manulife Financial Corp N/A 10.56% 0.58%
Lincoln National Corporation 10.43% 10.70% 0.62%

Dividends

Manulife Financial Corp pays an annual dividend of $0.60 per share and has a dividend yield of 3.0%. Lincoln National Corporation pays an annual dividend of $1.16 per share and has a dividend yield of 1.6%. Manulife Financial Corp pays out 50.8% of its earnings in the form of a dividend. Lincoln National Corporation pays out 19.1% 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 and Lincoln National Corporation has increased its dividend for 6 consecutive years.

Insider & Institutional Ownership

48.5% of Manulife Financial Corp shares are owned by institutional investors. Comparatively, 79.9% of Lincoln National Corporation shares are owned by institutional investors. 1.4% of Lincoln National Corporation shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current recommendations for Manulife Financial Corp and Lincoln National Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Manulife Financial Corp 0 3 6 0 2.67
Lincoln National Corporation 0 5 4 0 2.44

Manulife Financial Corp presently has a consensus target price of $22.00, suggesting a potential upside of 11.11%. Lincoln National Corporation has a consensus target price of $71.67, suggesting a potential upside of 0.77%. Given Manulife Financial Corp’s stronger consensus rating and higher probable upside, analysts clearly believe Manulife Financial Corp is more favorable than Lincoln National Corporation.

Earnings & Valuation

This table compares Manulife Financial Corp and Lincoln National Corporation’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Manulife Financial Corp $33.62 billion 1.16 $4.11 billion $1.18 16.78
Lincoln National Corporation $13.53 billion 1.18 $1.99 billion $6.06 11.74

Manulife Financial Corp has higher revenue and earnings than Lincoln National Corporation. Lincoln National Corporation 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.

Summary

Lincoln National Corporation beats Manulife Financial Corp on 10 of the 17 factors compared between the two stocks.

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.

About Lincoln National Corporation

Lincoln National Corporation is a holding company, which operates insurance and retirement businesses through subsidiary companies. The Company sells a range of wealth protection, accumulation and retirement income products and solutions, through its business segments. The Company operates through four segments: Annuities segment, which offers fixed (including indexed) and variable annuities; Retirement Plan Services segment, which provides employers with retirement plan products and services; Life Insurance segment, which focuses on the creation and protection of wealth through life insurance products, and Group Protection, which offers principally group non-medical insurance products. These products include fixed and indexed annuities, variable annuities, universal life insurance, variable universal life insurance, linked-benefit UL, term life insurance, indexed universal life insurance, employer-sponsored retirement plans and services, and group life, disability and dental.

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