National Western Life Group (NASDAQ: NWLI) and Genworth Financial (NYSE:GNW) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, institutional ownership, profitability, analyst recommendations, risk, dividends and valuation.

Insider and Institutional Ownership

79.0% of National Western Life Group shares are owned by institutional investors. Comparatively, 67.6% of Genworth Financial shares are owned by institutional investors. 1.0% of National Western Life Group shares are owned by company insiders. Comparatively, 0.3% of Genworth Financial shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings for National Western Life Group and Genworth Financial, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
National Western Life Group 0 0 0 0 N/A
Genworth Financial 0 3 2 0 2.40

Genworth Financial has a consensus target price of $3.95, suggesting a potential upside of 16.77%.

Profitability

This table compares National Western Life Group and Genworth Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
National Western Life Group 13.10% 5.33% 0.78%
Genworth Financial -1.66% -1.63% -0.23%

Valuation and Earnings

This table compares National Western Life Group and Genworth Financial’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
National Western Life Group $682.37 0.00 $100.89 $30.07 N/A
Genworth Financial $8,369.00 0.20 -$277.00 ($0.30) -11.27

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

Risk and Volatility

National Western Life Group has a beta of 1.47, meaning that its share price is 47% more volatile than the S&P 500. Comparatively, Genworth Financial has a beta of 2.8, meaning that its share price is 180% more volatile than the S&P 500.

Dividends

National Western Life Group pays an annual dividend of $0.36 per share. Genworth Financial does not pay a dividend. National Western Life Group pays out 1.2% of its earnings in the form of a dividend.

Summary

National Western Life Group beats Genworth Financial on 7 of the 11 factors compared between the two stocks.

National Western Life Group Company Profile

National Western Life Insurance Company (National Western) is a stock life insurance company. The Company operates in two segments: Domestic Insurance Operations and International Insurance Operations. The products marketed under domestic insurance operations are annuities, universal life insurance and traditional life insurance, which include both term and whole life products. National Western’s international operations focus on foreign nationals in upper socioeconomic classes. The Company provides life insurance products for the savings and protection needs of approximately 126,700 policyholders and for the asset accumulation and retirement needs of 139,100 annuity contract holders. National Western offers a portfolio of individual whole life, universal life and term insurance plans, and annuities, including supplementary riders.

Genworth Financial Company Profile

Genworth Financial, Inc. (Genworth) is a financial security company. The Company provides insurance, wealth management, investment and financial solutions. As of December 31, 2011, the Company had more than 15 million customers, with a presence in more than 25 countries. The Company operates in Insurance, Mortgage Insurance and Corporate and Runoff. The Mortgage Insurance Division includes the business segments, such as International Mortgage Insurance and U.S. Mortgage Insurance. The Corporate and Runoff Division includes the Runoff segment and Corporate and Other activities. In September 2013, Genworth Financial, Inc closed the sale of its Wealth Management business, including Genworth Financial Wealth Management and alternative solutions provider, the Altegris companies, to a partnership of Aquiline Capital Partners and Genstar Capital.

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