Metlife (NYSE: MET) and GWG Holdings (NASDAQ:GWGH) are both financials companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, risk, profitability, earnings and valuation.

Insider and Institutional Ownership

75.6% of Metlife shares are held by institutional investors. Comparatively, 0.2% of GWG Holdings shares are held by institutional investors. 0.3% of Metlife shares are held by company insiders. Comparatively, 77.4% of GWG Holdings shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Metlife and GWG Holdings’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Metlife $63.21 billion 0.81 $817.50 million $0.09 533.28
GWG Holdings $62.55 million 0.98 -$15.50 million ($2.68) -3.97

Metlife has higher revenue and earnings than GWG Holdings. GWG Holdings is trading at a lower price-to-earnings ratio than Metlife, indicating that it is currently the more affordable of the two stocks.

Dividends

Metlife pays an annual dividend of $1.60 per share and has a dividend yield of 3.3%. GWG Holdings does not pay a dividend. Metlife pays out 1,778.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. GWG Holdings has raised its dividend for 4 consecutive years.

Volatility and Risk

Metlife has a beta of 1.46, suggesting that its share price is 46% more volatile than the S&P 500. Comparatively, GWG Holdings has a beta of 0.5, suggesting that its share price is 50% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Metlife and GWG Holdings, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Metlife 1 4 8 0 2.54
GWG Holdings 0 0 2 0 3.00

Metlife currently has a consensus price target of $59.71, indicating a potential upside of 24.43%. GWG Holdings has a consensus price target of $14.50, indicating a potential upside of 36.19%. Given GWG Holdings’ stronger consensus rating and higher possible upside, analysts clearly believe GWG Holdings is more favorable than Metlife.

Profitability

This table compares Metlife and GWG Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Metlife 5.14% 4.89% 0.39%
GWG Holdings -21.92% -184.34% 4.35%

Summary

Metlife beats GWG Holdings on 10 of the 17 factors compared between the two stocks.

About Metlife

MetLife, Inc. is a provider of life insurance, annuities, employee benefits and asset management. The Company’s segments include U.S.; Asia; Latin America; Europe, the Middle East and Africa (EMEA); MetLife Holdings, and Corporate & Other. Its U.S. segment is organized into Group Benefits, Retirement and Income Solutions and Property & Casualty businesses. Its Asia segment offers products, including life insurance; accident and health insurance, and retirement and savings products. Latin America offers products, including life insurance, and retirement and savings products. Life insurance includes universal, variable and term life products. EMEA offers products, including life insurance, accident and health insurance, retirement and savings products, and credit insurance.

About GWG Holdings

GWG Holdings, Inc. is a financial service company. The Company is a financial purchaser of life insurance assets in the secondary market. The Company creates opportunities for consumers owning life insurance to obtain value for their policies as compared to the traditional options offered by insurance companies. The Company also creates opportunities for investors to participate in alternative asset classes, such as life insurance, not correlated to traditional financial markets. The Company conducts its life insurance related business through its subsidiary, GWG Life, LLC. It generally purchases life insurance assets directly from policy owners having purchased their life insurance in the primary market. Its operational platform offers various options to customers based on the market value of their life insurance, including selling the entire policy benefit for cash, or selling a portion of the policy benefit and retaining a portion of the benefit with no future premium obligation.

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