Primerica (NYSE: PRI) and National Western Life Group (NASDAQ:NWLI) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, earnings, analyst recommendations, profitability, institutional ownership and risk.

Profitability

This table compares Primerica and National Western Life Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Primerica 14.41% 18.48% 1.97%
National Western Life Group 13.10% 5.33% 0.78%

Analyst Ratings

This is a breakdown of recent ratings and target prices for Primerica and National Western Life Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Primerica 0 4 1 0 2.20
National Western Life Group 0 0 0 0 N/A

Primerica currently has a consensus price target of $84.67, suggesting a potential upside of 11.18%. Given Primerica’s higher probable upside, analysts clearly believe Primerica is more favorable than National Western Life Group.

Valuation and Earnings

This table compares Primerica and National Western Life Group’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Primerica $1.62 billion 2.11 $411.75 million $4.90 15.54
National Western Life Group $788.97 million 1.54 $171.25 million $30.07 11.14

Primerica has higher revenue and earnings than National Western Life Group. National Western Life Group is trading at a lower price-to-earnings ratio than Primerica, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Primerica has a beta of 1.14, indicating that its share price is 14% more volatile than the S&P 500. Comparatively, National Western Life Group has a beta of 1.47, indicating that its share price is 47% more volatile than the S&P 500.

Dividends

Primerica pays an annual dividend of $0.80 per share and has a dividend yield of 1.1%. National Western Life Group pays an annual dividend of $0.36 per share and has a dividend yield of 0.1%. Primerica pays out 16.3% of its earnings in the form of a dividend. National Western Life Group pays out 1.2% 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. National Western Life Group has raised its dividend for 6 consecutive years.

Institutional & Insider Ownership

94.9% of Primerica shares are owned by institutional investors. Comparatively, 79.0% of National Western Life Group shares are owned by institutional investors. 0.9% of Primerica shares are owned by company insiders. Comparatively, 1.0% of National Western Life Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

Primerica beats National Western Life Group on 11 of the 16 factors compared between the two stocks.

Primerica Company Profile

Primerica Inc. (Primerica) is a distributor of financial products to middle-income households in the United States and Canada. The Company operates through three segments: Term Life Insurance, Investment and Savings Products, and Corporate and Other Distributed Products. The Term Life Insurance segment includes underwriting profits on its in-force book of term life insurance policies, net of reinsurance, which are underwritten by its life insurance company subsidiaries. The Investment and Savings Products segment includes retail and managed mutual funds, and annuities distributed through licensed broker-dealer subsidiaries and includes segregated funds, an individual annuity savings product that it underwrites in Canada through Primerica Life Insurance Company of Canada (Primerica Life Canada). In the United States, it distributes mutual fund and annuity products of various third-party companies. It also earns fees for account servicing on a subset of the mutual funds it distributes.

National Western Life Group Company Profile

National Western Life Insurance Company (National Western) is a stock life insurance company. The Company operates in two segments: Domestic Insurance Operations and International Insurance Operations. The products marketed under domestic insurance operations are annuities, universal life insurance and traditional life insurance, which include both term and whole life products. National Western’s international operations focus on foreign nationals in upper socioeconomic classes. The Company provides life insurance products for the savings and protection needs of approximately 126,700 policyholders and for the asset accumulation and retirement needs of 139,100 annuity contract holders. National Western offers a portfolio of individual whole life, universal life and term insurance plans, and annuities, including supplementary riders.

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