Head to Head Analysis: Genworth Financial (GNW) and National General (NGHC)

Genworth Financial (NYSE: GNW) and National General (NASDAQ:NGHC) are both financials companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, dividends, institutional ownership, earnings, valuation, profitability and analyst recommendations.

Risk & Volatility

Genworth Financial has a beta of 2.81, meaning that its share price is 181% more volatile than the S&P 500. Comparatively, National General has a beta of 1.33, meaning that its share price is 33% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Genworth Financial 3.88% 1.57% 0.22%
National General 2.62% 7.30% 1.44%

Valuation and Earnings

This table compares Genworth Financial and National General’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Genworth Financial $8.37 billion 0.18 -$277.00 million $0.71 4.30
National General $3.55 billion 0.58 $172.21 million $0.97 19.81

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

Dividends

National General pays an annual dividend of $0.16 per share and has a dividend yield of 0.8%. Genworth Financial does not pay a dividend. National General pays out 16.5% of its earnings in the form of a dividend.

Institutional & Insider Ownership

66.7% of Genworth Financial shares are held by institutional investors. Comparatively, 45.6% of National General shares are held by institutional investors. 0.3% of Genworth Financial shares are held by company insiders. Comparatively, 3.4% of National General shares are held by company 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.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Genworth Financial and National General, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Genworth Financial 0 3 1 0 2.25
National General 0 1 3 0 2.75

Genworth Financial currently has a consensus target price of $3.88, indicating a potential upside of 27.05%. National General has a consensus target price of $27.00, indicating a potential upside of 40.48%. Given National General’s stronger consensus rating and higher probable upside, analysts clearly believe National General is more favorable than Genworth Financial.

Summary

National General beats Genworth Financial on 11 of the 16 factors compared between the two stocks.

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.

National General Company Profile

National General Holdings Corp. is a specialty personal lines insurance holding company. Through its subsidiaries, the Company provides a range of insurance products, including personal and commercial automobile, homeowners, umbrella, recreational vehicle, supplemental health, lender-placed and other niche products. It operates through two segments: Property and Casualty (P&C) and Accident and Health (A&H). Its P&C segment offers its P&C insurance products through a network of agents, a number of affinity partners and through direct-response marketing programs. Its A&H segment provides accident and non-major medical health insurance products targeting its existing P&C policyholders and the anticipated market of employed persons who are uninsured or underinsured. The P&C segment operates its business through three distribution channels: agency, affinity and direct. The A&H segment provides supplemental accident and health insurance products.

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