Principal Financial Group (NYSE: PFG) and Aflac (NYSE:AFL) are both large-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, earnings, profitability, institutional ownership, valuation and analyst recommendations.
Earnings & Valuation
This table compares Principal Financial Group and Aflac’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Principal Financial Group||$12.56 billion||1.56||$1.88 billion||$4.40||15.43|
|Aflac||$22.65 billion||1.46||$4.75 billion||$6.63||12.63|
Aflac has higher revenue and earnings than Principal Financial Group. Aflac 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.
This table compares Principal Financial Group and Aflac’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Principal Financial Group||10.15%||13.57%||0.63%|
This is a summary of current recommendations and price targets for Principal Financial Group and Aflac, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Principal Financial Group||1||6||2||0||2.11|
Principal Financial Group currently has a consensus price target of $66.78, indicating a potential downside of 1.65%. Aflac has a consensus price target of $78.40, indicating a potential downside of 6.40%. Given Principal Financial Group’s stronger consensus rating and higher probable upside, equities analysts plainly believe Principal Financial Group is more favorable than Aflac.
Insider & Institutional Ownership
68.2% of Principal Financial Group shares are held by institutional investors. Comparatively, 65.6% of Aflac shares are held by institutional investors. 1.5% of Principal Financial Group shares are held by company insiders. Comparatively, 3.0% of Aflac shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Principal Financial Group pays an annual dividend of $1.88 per share and has a dividend yield of 2.8%. Aflac pays an annual dividend of $1.72 per share and has a dividend yield of 2.1%. Principal Financial Group pays out 42.7% of its earnings in the form of a dividend. Aflac pays out 25.9% 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 increased its dividend for 5 consecutive years and Aflac has increased its dividend for 34 consecutive years.
Risk & Volatility
Principal Financial Group has a beta of 1.67, suggesting that its stock price is 67% more volatile than the S&P 500. Comparatively, Aflac has a beta of 0.96, suggesting that its stock price is 4% less volatile than the S&P 500.
About Principal Financial Group
Principal Financial Group, Inc. is an investment management company. The Company offers a range of financial products and services, including retirement, asset management and insurance. Its segments include Retirement and Income Solutions; Principal Global Investors, Principal International; U.S. Insurance Solutions, and Corporate. The Company offers a portfolio of products and services for retirement savings and retirement income. The Company’s Principal Global Investors segment manages assets for investors around the world. The Company offers pension accumulation products and services, mutual funds, asset management, income annuities and life insurance accumulation products. The Company’s U.S. Insurance Solutions segment provides group and individual insurance solutions. It focuses on small and medium-sized businesses, providing a range of retirement and employee benefit solutions, and individual insurance solutions to meet the needs of the business owners and their employees.
Aflac Incorporated is a business holding company. The Company is involved in supplemental health and life insurance, which is marketed and administered through its subsidiary, American Family Life Assurance Company of Columbus (Aflac). The Company’s insurance business consists of two segments: Aflac Japan and Aflac U.S. The Company designs the United States insurance products to provide supplemental coverage for people having medical or primary insurance coverage. Aflac U.S. offers accident coverage on both an individual and group basis. The Company offers cancer plans, critical illness plans, and critical care and recovery plans. The Company designs the United States insurance products to provide supplemental coverage for people having medical or primary insurance coverage. Aflac U.S. offers accident coverage on both an individual and group basis. The Company offers cancer plans, critical illness plans, and critical care and recovery plans.
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