Sun Life Financial (NYSE: SLF) and Aegon NV (NYSE:AEG) are both large-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, profitabiliy, risk, earnings, dividends and valuation.

Volatility & Risk

Sun Life Financial has a beta of 0.88, meaning that its share price is 12% less volatile than the S&P 500. Comparatively, Aegon NV has a beta of 1.39, meaning that its share price is 39% more volatile than the S&P 500.

Dividends

Sun Life Financial pays an annual dividend of $1.27 per share and has a dividend yield of 3.3%. Aegon NV pays an annual dividend of $0.24 per share and has a dividend yield of 4.2%. Sun Life Financial pays out 41.2% of its earnings in the form of a dividend. Aegon NV pays out 60.0% 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.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Sun Life Financial and Aegon NV, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sun Life Financial 0 8 3 0 2.27
Aegon NV 0 3 2 0 2.40

Sun Life Financial presently has a consensus target price of $46.20, indicating a potential upside of 20.25%. Aegon NV has a consensus target price of $5.00, indicating a potential downside of 12.43%. Given Sun Life Financial’s higher possible upside, equities analysts clearly believe Sun Life Financial is more favorable than Aegon NV.

Valuation and Earnings

This table compares Sun Life Financial and Aegon NV’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Sun Life Financial $21.27 billion 1.11 $2.99 billion $3.08 12.47
Aegon NV $63.18 billion 0.18 $2.17 billion $0.40 14.28

Sun Life Financial has higher revenue, but lower earnings than Aegon NV. Sun Life Financial is trading at a lower price-to-earnings ratio than Aegon NV, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Sun Life Financial and Aegon NV’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sun Life Financial 11.31% 13.02% 1.00%
Aegon NV 2.38% 6.30% 0.37%

Institutional & Insider Ownership

43.0% of Sun Life Financial shares are owned by institutional investors. Comparatively, 10.3% of Aegon NV 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.

Summary

Sun Life Financial beats Aegon NV on 10 of the 15 factors compared between the two stocks.

Sun Life Financial Company Profile

Sun Life Financial Inc. is the holding company of Sun Life Assurance Company of Canada. The Company is a financial services company providing a range of insurance, wealth and asset management solutions to individuals and corporate Clients. It operates through five segments. The Sun Life Financial Canada segment provides retail insurance and investment advice, products and services to people across Canada. The SLF U.S. segment has three business units: Group Benefits, International and In-force Management. Its Sun Life Financial Asset Management segment consists of MFS Investment Management and Sun Life Investment Management. The SLF Asia segment operates through subsidiaries in the Philippines, Hong Kong, Indonesia and Vietnam, as well as through joint ventures and associates with local partners in the Philippines, India, China and Malaysia. Its Corporate segment includes SLF U.K. and Corporate Support. Corporate Support operations consist of its Run-off reinsurance business.

Aegon NV Company Profile

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.

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