Head-To-Head Comparison: Waterdrop (NYSE:WDH) vs. Sun Life Financial (NYSE:SLF)

Sun Life Financial (NYSE:SLF) and Waterdrop (NYSE:WDH) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, institutional ownership, earnings, risk, analyst recommendations, dividends and valuation.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Sun Life Financial and Waterdrop, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sun Life Financial	1	6	4	1	2.42
Waterdrop	0	1	0	0	2.00

Sun Life Financial presently has a consensus price target of $103.50, suggesting a potential upside of 41.96%. Given Sun Life Financial’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Sun Life Financial is more favorable than Waterdrop.

Earnings & Valuation

This table compares Sun Life Financial and Waterdrop”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sun Life Financial	$29.99 billion	1.35	$2.68 billion	$3.85	18.94
Waterdrop	$568.81 million	0.63	$81.36 million	$0.21	4.76

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

Profitability

This table compares Sun Life Financial and Waterdrop’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sun Life Financial	8.62%	18.21%	1.09%
Waterdrop	10.69%	10.47%	7.40%

Insider & Institutional Ownership

52.3% of Sun Life Financial shares are held by institutional investors. Comparatively, 2.0% of Waterdrop shares are held by institutional investors. 24.6% of Waterdrop shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

Sun Life Financial pays an annual dividend of $2.74 per share and has a dividend yield of 3.8%. Waterdrop pays an annual dividend of $0.05 per share and has a dividend yield of 5.0%. Sun Life Financial pays out 71.2% of its earnings in the form of a dividend. Waterdrop pays out 23.8% 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. Sun Life Financial has increased its dividend for 11 consecutive years. Waterdrop is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk and Volatility

Sun Life Financial has a beta of 0.86, suggesting that its share price is 14% less volatile than the S&P 500. Comparatively, Waterdrop has a beta of -0.17, suggesting that its share price is 117% less volatile than the S&P 500.

Summary

Sun Life Financial beats Waterdrop on 13 of the 18 factors compared between the two stocks.

About Sun Life Financial

Sun Life Financial Inc. is a Canadian financial services company that provides insurance, wealth management and asset management services. Founded in 1865 as Sun Life Assurance Company of Canada, it has grown into an international business serving individual, workplace and institutional clients. The company offers life, health and dental insurance, disability coverage and group benefits, as well as savings, retirement and investment products. Its asset management businesses provide investment management services to individuals and institutions.

About Waterdrop

Waterdrop Inc. is a China-focused technology platform that connects consumers with insurance products and medical fundraising services. Its insurance business distributes policies from third-party insurers through online channels, including coverage for health, life and accidents. The company also operates Waterdrop Medical Crowdfunding, a platform through which people can seek donations to help cover medical expenses. Waterdrop was founded in 2016 by Shen Peng, who has served as the company’s chairman and chief executive officer.