Lincoln National Corporation (NYSE: LNC) and Manulife Financial Corp (NYSE:MFC) are both large-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, earnings, profitability, risk, institutional ownership, analyst recommendations and dividends.

Dividends

Lincoln National Corporation pays an annual dividend of $1.16 per share and has a dividend yield of 1.6%. Manulife Financial Corp pays an annual dividend of $0.60 per share and has a dividend yield of 3.0%. Lincoln National Corporation pays out 17.8% of its earnings in the form of a dividend. Manulife Financial Corp pays out 43.5% 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. Lincoln National Corporation has increased its dividend for 6 consecutive years and Manulife Financial Corp has increased its dividend for 3 consecutive years.

Valuation and Earnings

This table compares Lincoln National Corporation and Manulife Financial Corp’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Lincoln National Corporation $13.86 billion 1.14 $2.17 billion $6.52 10.91
Manulife Financial Corp $32.26 billion 1.23 $5.44 billion $1.38 14.59

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

Analyst Ratings

This is a summary of current ratings for Lincoln National Corporation and Manulife Financial Corp, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Lincoln National Corporation 0 5 4 0 2.44
Manulife Financial Corp 0 0 6 0 3.00

Lincoln National Corporation currently has a consensus price target of $73.11, indicating a potential upside of 2.77%. Manulife Financial Corp has a consensus price target of $24.00, indicating a potential upside of 19.17%. Given Manulife Financial Corp’s stronger consensus rating and higher probable upside, analysts plainly believe Manulife Financial Corp is more favorable than Lincoln National Corporation.

Institutional & Insider Ownership

80.8% of Lincoln National Corporation shares are held by institutional investors. Comparatively, 48.3% of Manulife Financial Corp shares are held by institutional investors. 1.4% of Lincoln National Corporation shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Risk & Volatility

Lincoln National Corporation has a beta of 1.99, indicating that its share price is 99% more volatile than the S&P 500. Comparatively, Manulife Financial Corp has a beta of 1.3, indicating that its share price is 30% more volatile than the S&P 500.

Profitability

This table compares Lincoln National Corporation and Manulife Financial Corp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Lincoln National Corporation 10.85% 10.99% 0.64%
Manulife Financial Corp N/A 11.33% 0.62%

Summary

Manulife Financial Corp beats Lincoln National Corporation on 9 of the 17 factors compared between the two stocks.

Lincoln National Corporation Company Profile

Lincoln National Corporation is a holding company, which operates insurance and retirement businesses through subsidiary companies. The Company sells a range of wealth protection, accumulation and retirement income products and solutions, through its business segments. The Company operates through four segments: Annuities segment, which offers fixed (including indexed) and variable annuities; Retirement Plan Services segment, which provides employers with retirement plan products and services; Life Insurance segment, which focuses on the creation and protection of wealth through life insurance products, and Group Protection, which offers principally group non-medical insurance products. These products include fixed and indexed annuities, variable annuities, universal life insurance, variable universal life insurance, linked-benefit UL, term life insurance, indexed universal life insurance, employer-sponsored retirement plans and services, and group life, disability and dental.

Manulife Financial Corp Company Profile

Manulife Financial Corporation (MFC) is a holding company of The Manufacturers Life Insurance Company (MLI), which is a life insurance company, and John Hancock Reassurance Company Ltd. (JHRECO), which is a reinsurance company. The Company operates as a financial services company with principal operations in Asia, Canada and the United States. The Company’s segments include Asia Division, Canadian Division, U.S. Division, and the Corporate and Other. The Company operates as Manulife in Canada and Asia and primarily as John Hancock in the United States. The product and service offerings under its Asia, Canadian and U.S. Divisions include Protection, Wealth and Asset Management, and Other Wealth. The Corporate and Other segment includes external asset management business, Property and Casualty (P&C) Reinsurance Business, and run-off reinsurance operations, including variable annuities, and accident and health.

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