Financial Analysis: Aegon NV (AEG) & Aflac (AFL)

Aegon NV (NYSE: AEG) and Aflac (NYSE:AFL) are both large-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, risk, profitability, institutional ownership, valuation, earnings and analyst recommendations.

Volatility and Risk

Aegon NV has a beta of 1.35, meaning that its share price is 35% more volatile than the S&P 500. Comparatively, Aflac has a beta of 0.97, meaning that its share price is 3% less volatile than the S&P 500.

Earnings & Valuation

This table compares Aegon NV and Aflac’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Aegon NV $63.63 billion 0.19 $3.20 billion $0.91 6.36
Aflac $22.65 billion 1.45 $4.75 billion $6.63 12.54

Aflac has higher revenue, but lower earnings than Aegon NV. Aegon NV is trading at a lower price-to-earnings ratio than Aflac, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings for Aegon NV and Aflac, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Aegon NV 0 5 1 0 2.17
Aflac 3 6 2 0 1.91

Aegon NV currently has a consensus target price of $4.80, indicating a potential downside of 17.10%. Aflac has a consensus target price of $75.56, indicating a potential downside of 9.13%. Given Aflac’s higher possible upside, analysts clearly believe Aflac is more favorable than Aegon NV.

Dividends

Aegon NV pays an annual dividend of $0.25 per share and has a dividend yield of 4.3%. Aflac pays an annual dividend of $1.72 per share and has a dividend yield of 2.1%. Aegon NV pays out 27.5% 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. Aflac has increased its dividend for 34 consecutive years.

Insider & Institutional Ownership

10.6% of Aegon NV shares are owned by institutional investors. Comparatively, 65.6% of Aflac shares are owned by institutional investors. 3.0% of Aflac shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Aegon NV and Aflac’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Aegon NV 5.18% 6.73% 0.40%
Aflac 11.98% 13.09% 2.05%

Summary

Aflac beats Aegon NV on 13 of the 17 factors compared between the two stocks.

About Aegon NV

Aegon N.V. (Aegon) is an international life insurance, pensions and asset management company. The Company’s segments include the Americas, which includes the United States, Mexico and Brazil; the Netherlands; the United Kingdom; Central & Eastern Europe; Spain & Portugal; Asia, and Aegon Asset Management. It offers protection against mortality, morbidity and longevity risks, including traditional and universal life. It offers products with mortality, morbidity, and longevity risks, including traditional and universal life; mortgages; annuity products, and banking products. It offers individual protection products, such as annuities, term insurance, income protection and international/offshore bonds. It has activities in the Czech Republic, Hungary, Poland, Romania, Slovakia and Turkey. It offers life insurance marketed to high-net-worth individuals in Hong Kong and Singapore. It also offers investment products covering third-party customers, insurance-linked solutions.

About Aflac

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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