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

Analyst Recommendations

This is a summary of recent recommendations for Prudential Financial and Lincoln National Corporation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Prudential Financial 0 6 7 0 2.54
Lincoln National Corporation 1 4 4 0 2.33

Prudential Financial currently has a consensus price target of $115.00, indicating a potential upside of 3.81%. Lincoln National Corporation has a consensus price target of $76.00, indicating a potential upside of 0.60%. Given Prudential Financial’s stronger consensus rating and higher possible upside, research analysts plainly believe Prudential Financial is more favorable than Lincoln National Corporation.

Dividends

Prudential Financial pays an annual dividend of $3.00 per share and has a dividend yield of 2.7%. Lincoln National Corporation pays an annual dividend of $1.16 per share and has a dividend yield of 1.5%. Prudential Financial pays out 33.6% of its earnings in the form of a dividend. Lincoln National Corporation pays out 17.8% 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. Prudential Financial has raised its dividend for 6 consecutive years and Lincoln National Corporation has raised its dividend for 8 consecutive years.

Earnings and Valuation

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Prudential Financial $59.25 billion 0.80 $7.12 billion $8.92 12.42
Lincoln National Corporation $13.86 billion 1.21 $2.17 billion $6.52 11.59

Prudential Financial has higher revenue and earnings than Lincoln National Corporation. Lincoln National Corporation is trading at a lower price-to-earnings ratio than Prudential Financial, indicating that it is currently the more affordable of the two stocks.

Profitability

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

Net Margins Return on Equity Return on Assets
Prudential Financial 7.15% 8.98% 0.56%
Lincoln National Corporation 10.85% 10.99% 0.64%

Volatility & Risk

Prudential Financial has a beta of 1.51, meaning that its share price is 51% more volatile than the S&P 500. Comparatively, Lincoln National Corporation has a beta of 1.99, meaning that its share price is 99% more volatile than the S&P 500.

Institutional & Insider Ownership

64.4% of Prudential Financial shares are held by institutional investors. Comparatively, 79.8% of Lincoln National Corporation shares are held by institutional investors. 0.7% of Prudential Financial shares are held by insiders. Comparatively, 1.4% of Lincoln National Corporation shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

Lincoln National Corporation beats Prudential Financial on 9 of the 17 factors compared between the two stocks.

About Prudential Financial

Prudential Financial, Inc., is a financial services company. The Company, through its subsidiaries, offers a range of financial products and services, which includes life insurance, annuities, retirement-related services, mutual funds and investment management. The Company’s operations consists of four divisions, which together encompass seven segments. The U.S. Retirement Solutions and Investment Management division consists of Individual Annuities, Retirement and Asset Management segments. The U.S. Individual Life and Group Insurance division consists of Individual Life and Group Insurance segments. The International Insurance division consists of International Insurance segment. The Closed Block division consists of Closed Block segment. The Company has operations in the United States, Asia, Europe and Latin America.

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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