Financial Contrast: Principal Financial Group (PFG) versus MetLife (MET)

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

Insider and Institutional Ownership

68.2% of Principal Financial Group shares are held by institutional investors. Comparatively, 74.2% of MetLife shares are held by institutional investors. 1.5% of Principal Financial Group shares are held by company insiders. Comparatively, 0.3% of MetLife shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Principal Financial Group and MetLife’s top-line 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 15.40
MetLife $63.21 billion 0.90 $817.50 million $0.09 592.18

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

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, MetLife has a beta of 1.47, suggesting that its stock price is 47% more volatile than the S&P 500.

Dividends

Principal Financial Group pays an annual dividend of $1.88 per share and has a dividend yield of 2.8%. MetLife pays an annual dividend of $1.60 per share and has a dividend yield of 3.0%. Principal Financial Group pays out 42.7% 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. Principal Financial Group has increased its dividend for 5 consecutive years and MetLife has increased its dividend for 4 consecutive years.

Profitability

This table compares Principal Financial Group and MetLife’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%
MetLife 0.30% 8.51% 0.65%

Analyst Ratings

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Principal Financial Group 1 6 2 0 2.11
MetLife 1 6 7 1 2.53

Principal Financial Group currently has a consensus price target of $66.78, suggesting a potential downside of 1.44%. MetLife has a consensus price target of $58.45, suggesting a potential upside of 9.68%. Given MetLife’s stronger consensus rating and higher probable upside, analysts plainly believe MetLife is more favorable than Principal Financial Group.

Summary

Principal Financial Group beats MetLife on 10 of the 18 factors compared between the two stocks.

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.

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, 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.

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