Globe Life (NYSE:GL) & Manulife Financial (NYSE:MFC) Critical Analysis

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

Dividends

Globe Life pays an annual dividend of $0.69 per share and has a dividend yield of 0.7%. Manulife Financial pays an annual dividend of $0.76 per share and has a dividend yield of 3.8%. Globe Life pays out 11.3% of its earnings in the form of a dividend. Manulife Financial pays out 36.0% 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.

Risk & Volatility

Globe Life has a beta of 0.95, suggesting that its share price is 5% less volatile than the S&P 500. Comparatively, Manulife Financial has a beta of 1.43, suggesting that its share price is 43% more volatile than the S&P 500.

Earnings & Valuation

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Globe Life $4.30 billion 2.52 $701.47 million $6.13 16.19
Manulife Financial $30.07 billion 1.29 $3.61 billion $2.11 9.42

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

Analyst Recommendations

This is a summary of recent recommendations for Globe Life and Manulife Financial, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Globe Life 1 0 1 0 2.00
Manulife Financial 0 0 2 0 3.00

Globe Life currently has a consensus target price of $99.00, suggesting a potential downside of 0.23%. Manulife Financial has a consensus target price of $30.67, suggesting a potential upside of 54.34%. Given Manulife Financial’s stronger consensus rating and higher probable upside, analysts clearly believe Manulife Financial is more favorable than Globe Life.

Profitability

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

Net Margins Return on Equity Return on Assets
Globe Life 16.57% 12.21% 3.08%
Manulife Financial 6.45% 12.86% 0.75%

Insider & Institutional Ownership

74.0% of Globe Life shares are owned by institutional investors. Comparatively, 42.4% of Manulife Financial shares are owned by institutional investors. 3.6% of Globe Life shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

About Globe Life

Globe Life Inc., through its subsidiaries, provides various life and supplemental health insurance products, and annuities to lower middle to middle income households in the United States. The company operates through four segments: Life Insurance, Supplemental Health Insurance, Annuities, and Investments. It offers term life, whole life, children's life, senior life, and family life insurance products; accidental benefits insurance; mortgage protection insurance; and medicare supplement plans. The company was formerly known as Torchmark Corporation and changed its name to Globe Life Inc. in August 2019. Globe Life Inc. is based in McKinney, Texas.

About Manulife Financial

Manulife Financial Corporation, together with its subsidiaries, provides financial advice, insurance, and wealth and asset management solutions for individuals, groups, and institutions in Asia, Canada, and the United States. The company offers individual life, and individual and group long-term care insurance; and guaranteed and partially guaranteed annuity products through insurance agents, brokers, banks, financial planners, and direct marketing. It also provides mutual funds and exchange-traded funds, group retirement and savings products, and institutional asset management services through insurance agents and brokers affiliated with the company, securities brokerage firms, financial advisors, pension plan consultants, and banks; and banking products, such as deposit and credit products to Canadian customers. In addition, the company is involved in property and casualty insurance and reinsurance businesses; and run-off reinsurance operations, including variable annuities, and accident and health. Further, it manages timberland and agricultural portfolios; and engages in insurance agency, portfolio and mutual fund management, mutual fund dealer, life and financial reinsurance, and mutual funds marketing businesses. Additionally, the company holds and manages oil and gas properties; holds oil and gas royalties, and foreign bonds and equities; provides investment management, counseling, advisory, and dealer services; and develops and operates hydro-electric power projects. Manulife Financial Corporation was founded in 1887 and is headquartered in Toronto, Canada.

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