Financial Review: Lincoln National (LNC) versus MetLife (MET)
Lincoln National (NYSE: LNC) and MetLife (NYSE:MET) are both large-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, earnings, analyst recommendations, valuation, institutional ownership, dividends and risk.
Lincoln National pays an annual dividend of $1.16 per share and has a dividend yield of 1.5%. MetLife pays an annual dividend of $1.60 per share and has a dividend yield of 3.0%. Lincoln National pays out 18.2% of its earnings in the form of a dividend. MetLife pays out 347.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Lincoln National has raised its dividend for 4 consecutive years and MetLife has raised its dividend for 6 consecutive years. MetLife is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares Lincoln National and MetLife’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Lincoln National||$13.33 billion||1.26||$1.19 billion||$6.39||11.97|
|MetLife||$63.48 billion||0.88||$800.00 million||$0.46||115.22|
Lincoln National has higher earnings, but lower revenue than MetLife. Lincoln National is trading at a lower price-to-earnings ratio than MetLife, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of recent recommendations for Lincoln National and MetLife, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Lincoln National currently has a consensus target price of $78.11, indicating a potential upside of 2.11%. MetLife has a consensus target price of $59.22, indicating a potential upside of 11.73%. Given MetLife’s stronger consensus rating and higher possible upside, analysts plainly believe MetLife is more favorable than Lincoln National.
Institutional & Insider Ownership
80.4% of Lincoln National shares are held by institutional investors. Comparatively, 76.4% of MetLife shares are held by institutional investors. 1.1% of Lincoln National shares are held by insiders. Comparatively, 0.3% of MetLife shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
This table compares Lincoln National and MetLife’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Risk & Volatility
Lincoln National has a beta of 2.01, meaning that its share price is 101% more volatile than the S&P 500. Comparatively, MetLife has a beta of 1.49, meaning that its share price is 49% more volatile than the S&P 500.
About Lincoln National
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.
MetLife, Inc. is a provider of life insurance, annuities, employee benefits and asset management. The Company’s segments include U.S.; Asia; Latin America; Europe, the Middle East and Africa (EMEA); MetLife Holdings, and Corporate & Other. Its U.S. segment is organized into Group Benefits, Retirement and Income Solutions and Property & Casualty businesses. Its Asia segment offers products, including life insurance; accident and health insurance, and retirement and savings products. Latin America offers products, including life insurance, and retirement and savings products. Life insurance includes universal, variable and term life products. EMEA offers products, including life insurance, accident and health insurance, retirement and savings products, and credit insurance.
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