GWG Holdings (NASDAQ: GWGH) and CNO Financial Group (NYSE:CNO) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, dividends, profitability, valuation, institutional ownership, earnings and analyst recommendations.

Volatility & Risk

GWG Holdings has a beta of 0.51, suggesting that its share price is 49% less volatile than the S&P 500. Comparatively, CNO Financial Group has a beta of 1.21, suggesting that its share price is 21% more volatile than the S&P 500.

Profitability

This table compares GWG Holdings and CNO Financial Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
GWG Holdings -21.92% -184.34% 4.35%
CNO Financial Group 9.61% 5.74% 0.81%

Earnings and Valuation

This table compares GWG Holdings and CNO Financial Group’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
GWG Holdings $62.55 million 0.90 -$15.50 million ($2.68) -3.62
CNO Financial Group $4.15 billion 0.94 $935.40 million $2.29 10.05

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

Institutional and Insider Ownership

42.5% of GWG Holdings shares are held by institutional investors. Comparatively, 95.4% of CNO Financial Group shares are held by institutional investors. 77.4% of GWG Holdings shares are held by company insiders. Comparatively, 2.0% of CNO Financial Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Dividends

CNO Financial Group pays an annual dividend of $0.36 per share and has a dividend yield of 1.6%. GWG Holdings does not pay a dividend. CNO Financial Group pays out 15.7% of its earnings in the form of a dividend. GWG Holdings has increased its dividend for 4 consecutive years.

Analyst Ratings

This is a summary of recent ratings and recommmendations for GWG Holdings and CNO Financial Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
GWG Holdings 0 0 2 0 3.00
CNO Financial Group 1 6 1 0 2.00

GWG Holdings presently has a consensus price target of $14.50, indicating a potential upside of 49.48%. CNO Financial Group has a consensus price target of $20.50, indicating a potential downside of 10.91%. Given GWG Holdings’ stronger consensus rating and higher probable upside, equities analysts plainly believe GWG Holdings is more favorable than CNO Financial Group.

Summary

CNO Financial Group beats GWG Holdings on 10 of the 17 factors compared between the two stocks.

About GWG Holdings

GWG Holdings, Inc. is the parent company of GWG Life, is a financial services company. The Company is a financial purchaser of life insurance assets in the secondary market. It creates opportunities for consumers owning life insurance to obtain value for their policies as compared to the traditional options offered by insurance companies. It also creates opportunities for investors to participate in alternative asset classes, such as life insurance, not correlated to traditional financial markets. Through its subsidiary GWG Life, LLC, it has developed an option for the life insurance secondary market called LifeCare Xchange (LCX). It provides seniors with the exchange value of their life insurance policies they can apply to long-term care and other post-retirement needs. It generally purchases life insurance assets directly from policy owners having purchased their life insurance in the primary market.

About CNO Financial Group

CNO Financial Group, Inc. is a holding company for a group of insurance companies operating throughout the United States that develops, markets and administers health insurance, annuity, individual life insurance and other insurance products. The Company’s segments include Bankers Life, Washington National and Colonial Penn. It sells health insurance, annuity, individual life insurance and other insurance products through three primary distribution channels: career agents, independent producers and direct marketing. The Company offers products in various categories, including health, annuities and life insurance. The health products include Medicare supplement, long-term care, prescription drug plan and Medicare advantage, supplemental health products and other health products. The annuities products include fixed index annuities and other fixed interest annuities. The life insurance products include interest-sensitive life products and traditional life products.

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