Head-To-Head Comparison: Principal Financial Group (NASDAQ:PFG) & Sompo (OTCMKTS:SMPNY)

Sompo (OTCMKTS:SMPNY) and Principal Financial Group (NASDAQ:PFG) are both large-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, dividends, profitability, valuation, risk and earnings.

Volatility and Risk

Sompo has a beta of 0.39, suggesting that its share price is 61% less volatile than the S&P 500. Comparatively, Principal Financial Group has a beta of 1.03, suggesting that its share price is 3% more volatile than the S&P 500.

Valuation & Earnings

This table compares Sompo and Principal Financial Group”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sompo	$35.81 billion	0.81	$2.79 billion	$1.49	10.39
Principal Financial Group	$15.13 billion	1.16	$1.57 billion	$4.97	15.89

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

Analyst Recommendations

This is a summary of current recommendations and price targets for Sompo and Principal Financial Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sompo	0	0	0	0	0.00
Principal Financial Group	0	1	0	0	2.00

Profitability

This table compares Sompo and Principal Financial Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sompo	8.14%	13.04%	2.83%
Principal Financial Group	7.53%	15.63%	0.55%

Dividends

Sompo pays an annual dividend of $0.38 per share and has a dividend yield of 2.5%. Principal Financial Group pays an annual dividend of $3.12 per share and has a dividend yield of 4.0%. Sompo pays out 25.5% of its earnings in the form of a dividend. Principal Financial Group pays out 62.8% 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. Principal Financial Group has raised its dividend for 2 consecutive years. Principal Financial Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

75.1% of Principal Financial Group shares are held by institutional investors. 1.1% of Principal Financial Group shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

Principal Financial Group beats Sompo on 10 of the 15 factors compared between the two stocks.

About Sompo

Sompo Holdings, Inc. provides property and casualty (P&C) insurance services in Japan and internationally. The company operates through Domestic P&C Insurance Business, Overseas Insurance Business, Domestic Life Insurance Business, and Nursing Care & Seniors Business segments. It offers various P&C insurance products, including automobile, fire, personal accident, and marine, as well as security, risk management, assistance, and warranty services; and life insurance products. The company also provides nursing care and seniors services; and customer security, health, and wellbeing support services. In addition, it offers asset management services; home remodeling services; and health support services comprising health guidance and employee assistance programs. The company was formerly known as Sompo Japan Nipponkoa Holdings, Inc. and changed its name to Sompo Holdings, Inc. in October 2016. The company was incorporated in 2010 and is headquartered in Tokyo, Japan.

About Principal Financial Group

Principal Financial Group, Inc. provides retirement, asset management, and insurance products and services to businesses, individuals, and institutional clients worldwide. The company operates through Retirement and Income Solutions, Principal Global Investors, Principal International, and U.S. Insurance Solutions segments. The Retirement and Income Solutions segment provides a portfolio of asset accumulation products and services for retirement savings and income. It offers products and services for defined contribution plans, including 401(k) and 403(b) plans, defined benefit pension plans, nonqualified executive benefit plans, employee stock ownership plans, equity compensation, and pension risk transfer services; individual retirement accounts; investment only products; and mutual funds, individual variable annuities, and bank products. The Principal Global Investors segment provides equity, fixed income, real estate, and other alternative investments, as well as asset allocation, stable value management, and other structured investment strategies. The Principal International segment offers pension accumulation products and services, mutual funds, asset management, income annuities, and life insurance accumulation products, as well as voluntary savings plans in Brazil, Chile, Mexico, China, Hong Kong Special Administrative Region, India, and Southeast Asia. The U.S. Insurance Solutions segment provides specialty benefits, such as group dental and vision insurance, group life insurance, and group and individual disability insurance, as well as administers group dental, disability, and vision benefits; and individual life insurance products comprising universal, variable universal, indexed universal, and term life insurance products in the United States. It also offers insurance solutions for small and medium-sized businesses and their owners, as well as executives. Principal Financial Group, Inc. was founded in 1879 and is based in Des Moines, Iowa.