Critical Analysis: Genworth Financial (GNW) vs. Marsh & McLennan Companies (MMC)
Marsh & McLennan Companies (NYSE: MMC) and Genworth Financial (NYSE:GNW) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, analyst recommendations, valuation, earnings, risk, institutional ownership and profitability.
Institutional and Insider Ownership
86.0% of Marsh & McLennan Companies shares are owned by institutional investors. Comparatively, 66.9% of Genworth Financial shares are owned by institutional investors. 1.5% of Marsh & McLennan Companies shares are owned by insiders. Comparatively, 0.3% of Genworth Financial shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Marsh & McLennan Companies has a beta of 1.01, suggesting that its share price is 1% more volatile than the S&P 500. Comparatively, Genworth Financial has a beta of 2.79, suggesting that its share price is 179% more volatile than the S&P 500.
Valuation & Earnings
This table compares Marsh & McLennan Companies and Genworth Financial’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Marsh & McLennan Companies||$13.21 billion||3.26||$1.77 billion||$3.65||23.12|
|Genworth Financial||$8.37 billion||0.20||-$277.00 million||$0.67||4.97|
Marsh & McLennan Companies has higher revenue and earnings than Genworth Financial. Genworth Financial is trading at a lower price-to-earnings ratio than Marsh & McLennan Companies, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of recent ratings and recommmendations for Marsh & McLennan Companies and Genworth Financial, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Marsh & McLennan Companies||0||5||6||0||2.55|
Marsh & McLennan Companies currently has a consensus target price of $84.91, indicating a potential upside of 0.60%. Genworth Financial has a consensus target price of $3.88, indicating a potential upside of 16.37%. Given Genworth Financial’s higher possible upside, analysts clearly believe Genworth Financial is more favorable than Marsh & McLennan Companies.
This table compares Marsh & McLennan Companies and Genworth Financial’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Marsh & McLennan Companies||13.86%||28.88%||10.26%|
Marsh & McLennan Companies pays an annual dividend of $1.50 per share and has a dividend yield of 1.8%. Genworth Financial does not pay a dividend. Marsh & McLennan Companies pays out 41.1% of its earnings in the form of a dividend. Marsh & McLennan Companies has raised its dividend for 7 consecutive years.
Marsh & McLennan Companies beats Genworth Financial on 14 of the 17 factors compared between the two stocks.
Marsh & McLennan Companies Company Profile
Marsh & McLennan Companies, Inc. is a professional services firm offering clients advice and solutions in risk, strategy and people. The Company is the parent company of various risk advisors and specialty consultants, including Marsh, the insurance broker; Guy Carpenter, the risk and reinsurance specialist; Mercer, the provider of human resource and investment related financial advice and services, and Oliver Wyman Group, the management and economic consultancy. It conducts business through two segments: Risk and Insurance Services, which includes risk management activities, as well as insurance and reinsurance broking and services, and Consulting includes health, retirement, talent and investments consulting services and products, and specialized management, economic and brand consulting services. It conducts business in the Risk and Insurance Services segment through Marsh and Guy Carpenter. It conducts business in the Consulting segment through Mercer and Oliver Wyman Group.
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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