Fidelity and Guaranty Life (FGL) versus Torchmark Corporation (TMK) Financial Analysis
Fidelity and Guaranty Life (NYSE: FGL) and Torchmark Corporation (NYSE:TMK) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, profitability, institutional ownership, valuation, earnings, analyst recommendations and dividends.
Fidelity and Guaranty Life pays an annual dividend of $0.26 per share and has a dividend yield of 0.8%. Torchmark Corporation pays an annual dividend of $0.60 per share and has a dividend yield of 0.7%. Fidelity and Guaranty Life pays out 7.9% of its earnings in the form of a dividend. Torchmark Corporation pays out 12.8% 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. Fidelity and Guaranty Life has increased its dividend for 7 consecutive years. Fidelity and Guaranty Life is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares Fidelity and Guaranty Life and Torchmark Corporation’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%|
This is a summary of current recommendations for Fidelity and Guaranty Life and Torchmark Corporation, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Fidelity and Guaranty Life||0||2||0||0||2.00|
Fidelity and Guaranty Life currently has a consensus target price of $26.40, indicating a potential downside of 15.25%. Torchmark Corporation has a consensus target price of $75.33, indicating a potential downside of 10.87%. Given Torchmark Corporation’s higher possible upside, analysts plainly believe Torchmark Corporation is more favorable than Fidelity and Guaranty Life.
Institutional & Insider Ownership
23.5% of Fidelity and Guaranty Life shares are owned by institutional investors. Comparatively, 72.2% of Torchmark Corporation shares are owned by institutional investors. 0.6% of Fidelity and Guaranty Life shares are owned by insiders. Comparatively, 3.8% of Torchmark Corporation shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Valuation & Earnings
This table compares Fidelity and Guaranty Life and Torchmark Corporation’s gross 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||1.29||$550.00 million||$3.29||9.47|
|Torchmark Corporation||$4.02 billion||2.45||$864.53 million||$4.70||17.98|
Torchmark Corporation has higher revenue and earnings than Fidelity and Guaranty Life. Fidelity and Guaranty Life is trading at a lower price-to-earnings ratio than Torchmark Corporation, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Fidelity and Guaranty Life has a beta of 0.89, suggesting that its stock price is 11% less volatile than the S&P 500. Comparatively, Torchmark Corporation has a beta of 1, suggesting that its stock price has a similar volatility profile to the S&P 500.
Torchmark Corporation beats Fidelity and Guaranty Life on 12 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.
Torchmark Corporation Company Profile
Torchmark Corporation (Torchmark) is an insurance holding company. The Company, through its subsidiaries, provides a range of life and health insurance products and annuities to a base of customers. The Company’s segments include life insurance, health insurance, annuities and investment. The life insurance segment includes traditional and interest-sensitive whole life insurance as well as term life insurance. The Health insurance products are guaranteed-renewable and include Medicare Supplement, critical illness, accident and limited-benefit supplemental hospital and surgical coverage’s. Annuities include fixed-benefit contracts. The Company markets its insurance products through various distribution channels, each of which sells the products of its insurance segments. Its subsidiaries include American Income Life Insurance Company (American Income) and Liberty National Life Insurance Company (Liberty National).
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