MetLife (NYSE: MET) and Unum Group (NYSE:UNM) are both large-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their profitabiliy, dividends, institutional ownership, earnings, risk, analyst recommendations and valuation.

Earnings and Valuation

This table compares MetLife and Unum Group’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
MetLife $61.21 billion 0.96 -$566.25 million ($0.62) -88.14
Unum Group $11.13 billion 0.98 $1.64 billion $4.08 11.72

Unum Group has higher revenue, but lower earnings than MetLife. MetLife is trading at a lower price-to-earnings ratio than Unum Group, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current ratings and target prices for MetLife and Unum Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MetLife 1 3 6 0 2.50
Unum Group 2 7 1 0 1.90

MetLife currently has a consensus target price of $56.98, suggesting a potential upside of 4.27%. Unum Group has a consensus target price of $44.44, suggesting a potential downside of 7.02%. Given MetLife’s stronger consensus rating and higher probable upside, equities analysts clearly believe MetLife is more favorable than Unum Group.

Profitability

This table compares MetLife and Unum Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
MetLife -0.95% 7.57% 0.60%
Unum Group 8.54% 10.23% 1.48%

Institutional and Insider Ownership

74.5% of MetLife shares are held by institutional investors. Comparatively, 93.0% of Unum Group shares are held by institutional investors. 0.3% of MetLife shares are held by company insiders. Comparatively, 0.5% of Unum Group shares are held by company 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.

Volatility and Risk

MetLife has a beta of 1.46, meaning that its stock price is 46% more volatile than the S&P 500. Comparatively, Unum Group has a beta of 1.55, meaning that its stock price is 55% more volatile than the S&P 500.

Dividends

MetLife pays an annual dividend of $1.60 per share and has a dividend yield of 2.9%. Unum Group pays an annual dividend of $0.80 per share and has a dividend yield of 1.7%. MetLife pays out -258.1% of its earnings in the form of a dividend. Unum Group pays out 19.6% 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 8 consecutive years and Unum Group has increased its dividend for 4 consecutive years. MetLife is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Unum Group beats MetLife on 9 of the 16 factors compared between the two stocks.

About MetLife

MetLife, Inc. is a provider of life insurance, annuities, employee benefits and asset management. The Company’s segments include U.S.; Asia; Latin America; Europe, the Middle East and Africa (EMEA); MetLife Holdings; Brighthouse Financial, and Corporate & Other. Its U.S. segment is organized into Group Benefits, Retirement and Income Solutions and Property & Casualty businesses. Its Asia segment offers products, including life insurance; accident and health insurance, and retirement and savings products. Latin America offers products, including life insurance, and retirement and savings products. Life insurance includes universal, variable and term life products. EMEA offers products, including life insurance, accident and health insurance, retirement and savings products, and credit insurance. The Brighthouse Financial segment offers products and services, including variable, fixed, index-linked and income annuities, as well as variable, universal, term and whole life products.

About Unum Group

Unum Group is a provider of financial protection benefits in the United States and the United Kingdom. The Company’s products include disability, life, accident, critical illness, dental and vision, and other related services. Its segments include Unum US, Unum UK, Colonial Life, Closed Block and Corporate. Its Unum US segment includes group long-term and short-term disability insurance, group life and accidental death and dismemberment products, and supplemental and voluntary lines of business. Its Unum UK segment includes insurance for group long-term disability, group life, and supplemental lines of business, which include dental, individual disability and critical illness products. Its Colonial Life segment includes insurance for accident, sickness, and disability products, life products, and cancer and critical illness products issued primarily by Colonial Life & Accident Insurance Company and marketed to employees. Its Closed Block segment consists of other insurance products.

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