Unum Group (NYSE: UNM) and Prudential Financial (NYSE:PRU) are both large-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their dividends, analyst recommendations, valuation, profitability, earnings, institutional ownership and risk.
Unum Group pays an annual dividend of $0.92 per share and has a dividend yield of 1.9%. Prudential Financial pays an annual dividend of $3.00 per share and has a dividend yield of 2.8%. Unum Group pays out 22.2% of its earnings in the form of a dividend. Prudential Financial pays out 33.6% 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. Unum Group has raised its dividend for 8 consecutive years and Prudential Financial has raised its dividend for 8 consecutive years.
This is a breakdown of recent ratings for Unum Group and Prudential Financial, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Unum Group presently has a consensus target price of $45.63, indicating a potential downside of 8.20%. Prudential Financial has a consensus target price of $111.18, indicating a potential upside of 5.20%. Given Prudential Financial’s stronger consensus rating and higher possible upside, analysts clearly believe Prudential Financial is more favorable than Unum Group.
Volatility & Risk
Unum Group has a beta of 1.56, indicating that its share price is 56% more volatile than the S&P 500. Comparatively, Prudential Financial has a beta of 1.5, indicating that its share price is 50% more volatile than the S&P 500.
Earnings & Valuation
This table compares Unum Group and Prudential Financial’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Unum Group||$11.19 billion||1.00||$1.66 billion||$4.15||11.98|
|Prudential Financial||$59.25 billion||0.77||$7.12 billion||$8.92||11.85|
Prudential Financial has higher revenue and earnings than Unum Group. Prudential Financial is trading at a lower price-to-earnings ratio than Unum Group, indicating that it is currently the more affordable of the two stocks.
This table compares Unum Group and Prudential Financial’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Institutional and Insider Ownership
93.9% of Unum Group shares are owned by institutional investors. Comparatively, 63.5% of Prudential Financial shares are owned by institutional investors. 0.5% of Unum Group shares are owned by company insiders. Comparatively, 0.7% of Prudential Financial shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
About Unum Group
Unum Group is a provider of financial protection benefits in the United States and the United Kingdom. The Company’s products include disability, life, accident, critical illness, dental and vision, and other related services. Its segments include Unum US, Unum UK, Colonial Life, Closed Block and Corporate. Its Unum US segment includes group long-term and short-term disability insurance, group life and accidental death and dismemberment products, and supplemental and voluntary lines of business. Its Unum UK segment includes insurance for group long-term disability, group life, and supplemental lines of business, which include dental, individual disability and critical illness products. Its Colonial Life segment includes insurance for accident, sickness, and disability products, life products, and cancer and critical illness products issued primarily by Colonial Life & Accident Insurance Company and marketed to employees. Its Closed Block segment consists of other insurance products.
About Prudential Financial
Prudential Financial, Inc., is a financial services company. The Company, through its subsidiaries, offers a range of financial products and services, which includes life insurance, annuities, retirement-related services, mutual funds and investment management. The Company’s operations consists of four divisions, which together encompass seven segments. The U.S. Retirement Solutions and Investment Management division consists of Individual Annuities, Retirement and Asset Management segments. The U.S. Individual Life and Group Insurance division consists of Individual Life and Group Insurance segments. The International Insurance division consists of International Insurance segment. The Closed Block division consists of Closed Block segment. The Company has operations in the United States, Asia, Europe and Latin America.
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