Fidelity and Guaranty Life (NYSE: FGL) and FBL Financial Group (NYSE:FFG) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, risk, valuation, institutional ownership, earnings, analyst recommendations and profitabiliy.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Fidelity and Guaranty Life and FBL Financial Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Fidelity and Guaranty Life 0 2 0 0 2.00
FBL Financial Group 1 0 0 0 1.00

Fidelity and Guaranty Life presently has a consensus target price of $26.40, indicating a potential downside of 15.38%. Given Fidelity and Guaranty Life’s stronger consensus rating and higher probable upside, equities analysts clearly believe Fidelity and Guaranty Life is more favorable than FBL Financial Group.

Valuation & Earnings

This table compares Fidelity and Guaranty Life and FBL Financial Group’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Fidelity and Guaranty Life $1.41 billion 1.31 $545.00 million $3.29 9.48
FBL Financial Group $728.67 million 2.38 $173.93 million $4.61 15.08

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

Institutional & Insider Ownership

24.6% of Fidelity and Guaranty Life shares are owned by institutional investors. Comparatively, 29.4% of FBL Financial Group shares are owned by institutional investors. 0.6% of Fidelity and Guaranty Life shares are owned by company insiders. Comparatively, 0.6% of FBL Financial Group shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

Fidelity and Guaranty Life pays an annual dividend of $0.26 per share and has a dividend yield of 0.8%. FBL Financial Group pays an annual dividend of $1.76 per share and has a dividend yield of 2.5%. Fidelity and Guaranty Life pays out 7.9% of its earnings in the form of a dividend. FBL Financial Group pays out 38.2% 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. Fidelity and Guaranty Life has increased its dividend for 4 consecutive years.

Profitability

This table compares Fidelity and Guaranty Life and FBL Financial Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Fidelity and Guaranty Life 13.61% 8.00% 0.55%
FBL Financial Group 15.70% 9.12% 1.16%

Volatility & Risk

Fidelity and Guaranty Life has a beta of 0.9, meaning that its stock price is 10% less volatile than the S&P 500. Comparatively, FBL Financial Group has a beta of 0.88, meaning that its stock price is 12% less volatile than the S&P 500.

Summary

FBL Financial Group beats Fidelity and Guaranty Life on 9 of the 16 factors compared between the two stocks.

Fidelity and Guaranty Life Company Profile

Fidelity & Guaranty Life (FGL) is a holding company focused on obtaining controlling equity stakes in companies that operate across various industries. FGL’s primary business is the sale of individual life insurance products and annuities through independent agents, managing general agents, and specialty brokerage firms and in selected institutional markets. FGL’s principal products are deferred annuities (including fixed indexed annuity (FIA) contracts), immediate annuities and life insurance products. FGL markets products through its insurance subsidiaries, Fidelity & Guaranty Life Insurance Company (FGL Insurance) and Fidelity & Guaranty Life Insurance Company of New York (FGL NY Insurance). It distributes and services primarily fixed rate annuities, including FIAs. The Company provides FIA’s for pre-retirement wealth accumulation and post-retirement income management. Its life insurance provides wealth protection and transfer opportunities through indexed universal life products.

FBL Financial Group Company Profile

FBL Financial Group, Inc. sells individual life insurance and annuity products under the brand name of Farm Bureau Financial Services. The Company’s segments are Annuity Segment, which sells a variety of traditional annuity products; Life Insurance Segment, which sells a range of traditional and universal life insurance products, and Corporate and Other segment, which provides various support operations, corporate capital and other product lines. It also offers life and annuity products through its subsidiary, Greenfields Life Insurance Company. Its other subsidiaries support various functional areas and affiliates by providing investment advisory and marketing and distribution services. It manages all aspects of two Farm Bureau affiliated property-casualty insurance companies, Farm Bureau Property & Casualty Insurance Company and Western Agricultural Insurance Company.

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