Prudential Financial (NYSE: PRU) and Manulife Financial Corp (NYSE:MFC) are both large-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, risk, institutional ownership, dividends, profitability, analyst recommendations and earnings.

Dividends

Prudential Financial pays an annual dividend of $3.00 per share and has a dividend yield of 2.7%. Manulife Financial Corp pays an annual dividend of $0.66 per share and has a dividend yield of 3.1%. Prudential Financial pays out 30.2% of its earnings in the form of a dividend. Manulife Financial Corp pays out 47.1% 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 increased its dividend for 8 consecutive years and Manulife Financial Corp has increased its dividend for 3 consecutive years.

Volatility & Risk

Prudential Financial has a beta of 1.56, meaning that its share price is 56% more volatile than the S&P 500. Comparatively, Manulife Financial Corp has a beta of 1.32, meaning that its share price is 32% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for Prudential Financial and Manulife Financial Corp, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Prudential Financial 0 6 8 0 2.57
Manulife Financial Corp 0 1 1 0 2.50

Prudential Financial currently has a consensus price target of $115.67, suggesting a potential upside of 4.73%. Manulife Financial Corp has a consensus price target of $27.00, suggesting a potential upside of 28.14%. Given Manulife Financial Corp’s higher probable upside, analysts clearly believe Manulife Financial Corp is more favorable than Prudential Financial.

Insider and Institutional Ownership

64.5% of Prudential Financial shares are owned by institutional investors. Comparatively, 45.9% of Manulife Financial Corp shares are owned by institutional investors. 0.7% of Prudential Financial shares are owned 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.

Valuation and Earnings

This table compares Prudential Financial and Manulife Financial Corp’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Prudential Financial $51.57 billion 0.91 $4.37 billion $9.94 11.11
Manulife Financial Corp $40.27 billion 1.04 $2.26 billion $1.40 15.05

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

Profitability

This table compares Prudential Financial and Manulife Financial Corp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Prudential Financial 7.71% 9.51% 0.57%
Manulife Financial Corp N/A 11.55% 0.64%

Summary

Prudential Financial beats Manulife Financial Corp on 11 of the 17 factors compared between the two stocks.

Prudential Financial Company Profile

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.

Manulife Financial Corp Company Profile

Manulife Financial Corporation (MFC) is a holding company of The Manufacturers Life Insurance Company (MLI), which is a life insurance company, and John Hancock Reassurance Company Ltd. (JHRECO), which is a reinsurance company. The Company operates as a financial services company with principal operations in Asia, Canada and the United States. The Company’s segments include Asia Division, Canadian Division, U.S. Division, and the Corporate and Other. The Company operates as Manulife in Canada and Asia and primarily as John Hancock in the United States. The product and service offerings under its Asia, Canadian and U.S. Divisions include Protection, Wealth and Asset Management, and Other Wealth. The Corporate and Other segment includes external asset management business, Property and Casualty (P&C) Reinsurance Business, and run-off reinsurance operations, including variable annuities, and accident and health.

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