FBL Financial Group (NYSE: FFG) and Fidelity and Guaranty Life (NYSE:FGL) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, risk, earnings, valuation and analyst recommendations.
Profitability
This table compares FBL Financial Group and Fidelity and Guaranty Life’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| FBL Financial Group | 15.70% | 9.12% | 1.16% |
| Fidelity and Guaranty Life | 13.61% | 8.00% | 0.55% |
Insider & Institutional Ownership
29.4% of FBL Financial Group shares are held by institutional investors. Comparatively, 24.9% of Fidelity and Guaranty Life shares are held by institutional investors. 0.6% of FBL Financial Group shares are held by company insiders. Comparatively, 0.6% of Fidelity and Guaranty Life 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.
Dividends
FBL Financial Group pays an annual dividend of $1.76 per share and has a dividend yield of 2.6%. Fidelity and Guaranty Life pays an annual dividend of $0.26 per share and has a dividend yield of 0.8%. FBL Financial Group pays out 38.2% of its earnings in the form of a dividend. Fidelity and Guaranty Life pays out 7.9% 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. FBL Financial Group has increased its dividend for 4 consecutive years. FBL Financial Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Analyst Recommendations
This is a summary of recent recommendations for FBL Financial Group and Fidelity and Guaranty Life, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| FBL Financial Group | 0 | 1 | 0 | 0 | 2.00 |
| Fidelity and Guaranty Life | 0 | 2 | 0 | 0 | 2.00 |
Fidelity and Guaranty Life has a consensus price target of $26.40, indicating a potential downside of 15.25%. Given Fidelity and Guaranty Life’s higher probable upside, analysts plainly believe Fidelity and Guaranty Life is more favorable than FBL Financial Group.
Earnings & Valuation
This table compares FBL Financial Group and Fidelity and Guaranty Life’s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| FBL Financial Group | $736.38 million | 2.33 | $184.11 million | $4.61 | 14.96 |
| Fidelity and Guaranty Life | $1.41 billion | 1.29 | $550.00 million | $3.29 | 9.47 |
Fidelity and Guaranty Life has higher revenue and earnings than FBL Financial Group. Fidelity and Guaranty Life is trading at a lower price-to-earnings ratio than FBL Financial Group, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
FBL Financial Group has a beta of 0.88, meaning that its stock price is 12% less volatile than the S&P 500. Comparatively, Fidelity and Guaranty Life has a beta of 0.9, meaning that its stock price is 10% less volatile than the S&P 500.
Summary
FBL Financial Group beats Fidelity and Guaranty Life on 9 of the 14 factors compared between the two stocks.
About FBL Financial Group
FBL Financial Group, Inc. sells individual life insurance and annuity products under the brand name of Farm Bureau Financial Services. The Company’s segments are Annuity Segment, which sells a variety of traditional annuity products; Life Insurance Segment, which sells a range of traditional and universal life insurance products, and Corporate and Other segment, which provides various support operations, corporate capital and other product lines. It also offers life and annuity products through its subsidiary, Greenfields Life Insurance Company. Its other subsidiaries support various functional areas and affiliates by providing investment advisory and marketing and distribution services. It manages all aspects of two Farm Bureau affiliated property-casualty insurance companies, Farm Bureau Property & Casualty Insurance Company and Western Agricultural Insurance Company.
About Fidelity and Guaranty Life
Fidelity & Guaranty Life (FGL) is a holding company focused on obtaining controlling equity stakes in companies that operate across various industries. FGL’s primary business is the sale of individual life insurance products and annuities through independent agents, managing general agents, and specialty brokerage firms and in selected institutional markets. FGL’s principal products are deferred annuities (including fixed indexed annuity (FIA) contracts), immediate annuities and life insurance products. FGL markets products through its insurance subsidiaries, Fidelity & Guaranty Life Insurance Company (FGL Insurance) and Fidelity & Guaranty Life Insurance Company of New York (FGL NY Insurance). It distributes and services primarily fixed rate annuities, including FIAs. The Company provides FIA’s for pre-retirement wealth accumulation and post-retirement income management. Its life insurance provides wealth protection and transfer opportunities through indexed universal life products.
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