Prudential Financial (PRU) & CNO Financial Group (CNO) Critical Comparison
Prudential Financial (NYSE: PRU) and CNO Financial Group (NYSE:CNO) are both mid-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, dividends, risk, valuation, earnings and institutional ownership.
This is a summary of current recommendations and price targets for Prudential Financial and CNO Financial Group, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|CNO Financial Group||1||6||1||0||2.00|
Prudential Financial currently has a consensus price target of $111.18, indicating a potential upside of 9.06%. CNO Financial Group has a consensus price target of $20.50, indicating a potential downside of 8.11%. Given Prudential Financial’s stronger consensus rating and higher probable upside, research analysts clearly believe Prudential Financial is more favorable than CNO Financial Group.
Prudential Financial pays an annual dividend of $3.00 per share and has a dividend yield of 2.9%. CNO Financial Group pays an annual dividend of $0.36 per share and has a dividend yield of 1.6%. Prudential Financial pays out 33.6% of its earnings in the form of a dividend. CNO Financial Group pays out 15.7% 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. Prudential Financial has raised its dividend for 8 consecutive years and CNO Financial Group has raised its dividend for 4 consecutive years. Prudential Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Institutional and Insider Ownership
63.6% of Prudential Financial shares are owned by institutional investors. Comparatively, 97.1% of CNO Financial Group shares are owned by institutional investors. 0.7% of Prudential Financial shares are owned by company insiders. Comparatively, 2.0% of CNO Financial Group shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Valuation and Earnings
This table compares Prudential Financial and CNO Financial Group’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Prudential Financial||$59.25 billion||0.73||$7.12 billion||$8.92||11.43|
|CNO Financial Group||$4.15 billion||0.91||$935.40 million||$2.29||9.74|
Prudential Financial has higher revenue and earnings than CNO Financial Group. CNO Financial Group is trading at a lower price-to-earnings ratio than Prudential Financial, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
Prudential Financial has a beta of 1.5, meaning that its stock price is 50% more volatile than the S&P 500. Comparatively, CNO Financial Group has a beta of 1.22, meaning that its stock price is 22% more volatile than the S&P 500.
This table compares Prudential Financial and CNO Financial Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|CNO Financial Group||9.61%||5.74%||0.81%|
Prudential Financial beats CNO Financial Group on 10 of the 17 factors compared between the two stocks.
Prudential Financial Company Profile
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.
CNO Financial Group Company Profile
CNO Financial Group, Inc. is a holding company for a group of insurance companies operating throughout the United States that develops, markets and administers health insurance, annuity, individual life insurance and other insurance products. The Company’s segments include Bankers Life, Washington National and Colonial Penn. It sells health insurance, annuity, individual life insurance and other insurance products through three primary distribution channels: career agents, independent producers and direct marketing. The Company offers products in various categories, including health, annuities and life insurance. The health products include Medicare supplement, long-term care, prescription drug plan and Medicare advantage, supplemental health products and other health products. The annuities products include fixed index annuities and other fixed interest annuities. The life insurance products include interest-sensitive life products and traditional life products.
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