Financial Review: MetLife (MET) versus Manulife Financial Corp (MFC)

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

Analyst Ratings

This is a breakdown of current recommendations for Manulife Financial Corp and MetLife, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Manulife Financial Corp 0 0 6 0 3.00
MetLife 1 4 8 0 2.54

Manulife Financial Corp presently has a consensus target price of $24.00, suggesting a potential upside of 23.27%. MetLife has a consensus target price of $59.71, suggesting a potential upside of 26.99%. Given MetLife’s higher possible upside, analysts clearly believe MetLife is more favorable than Manulife Financial Corp.

Volatility and Risk

Manulife Financial Corp has a beta of 1.3, indicating that its share price is 30% more volatile than the S&P 500. Comparatively, MetLife has a beta of 1.46, indicating that its share price is 46% more volatile than the S&P 500.

Institutional & Insider Ownership

48.3% of Manulife Financial Corp shares are held by institutional investors. Comparatively, 75.6% of MetLife shares are held by institutional investors. 0.3% of MetLife shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Dividends

Manulife Financial Corp pays an annual dividend of $0.60 per share and has a dividend yield of 3.1%. MetLife pays an annual dividend of $1.60 per share and has a dividend yield of 3.4%. Manulife Financial Corp pays out 43.5% of its earnings in the form of a dividend. MetLife pays out 1,778.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Manulife Financial Corp has increased its dividend for 4 consecutive years and MetLife has increased its dividend for 3 consecutive years.

Profitability

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

Net Margins Return on Equity Return on Assets
Manulife Financial Corp N/A 11.33% 0.62%
MetLife 0.30% 8.51% 0.65%

Earnings and Valuation

This table compares Manulife Financial Corp and MetLife’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Manulife Financial Corp $31.63 billion 1.22 $4.81 billion $1.38 14.11
MetLife $63.21 billion 0.79 $817.50 million $0.09 522.50

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

Summary

MetLife beats Manulife Financial Corp on 10 of the 17 factors compared between the two stocks.

About Manulife Financial Corp

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.

About MetLife

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; Brighthouse Financial, 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. The Brighthouse Financial segment offers products and services, including variable, fixed, index-linked and income annuities, as well as variable, universal, term and whole life products.

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