Symetra Financial (NYSE: SYA) and Principal Financial Group (NYSE:PFG) are both financials companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, dividends, earnings, profitability, analyst recommendations, valuation and risk.

Earnings and Valuation

This table compares Symetra Financial and Principal Financial Group’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Symetra Financial N/A N/A N/A $1.36 N/A
Principal Financial Group $12.38 billion 1.48 $1.32 billion $7.88 8.03

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

Analyst Recommendations

This is a summary of current ratings and recommmendations for Symetra Financial and Principal Financial Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Symetra Financial 0 0 0 0 N/A
Principal Financial Group 0 5 3 0 2.38

Principal Financial Group has a consensus price target of $72.38, indicating a potential upside of 14.39%.

Profitability

This table compares Symetra Financial and Principal Financial Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Symetra Financial 3.63% 2.50% 0.23%
Principal Financial Group 12.35% 13.55% 0.63%

Institutional & Insider Ownership

68.6% of Principal Financial Group shares are owned by institutional investors. 1.5% of Principal Financial Group shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Dividends

Symetra Financial pays an annual dividend of $0.44 per share. Principal Financial Group pays an annual dividend of $1.96 per share and has a dividend yield of 3.1%. Symetra Financial pays out 32.4% of its earnings in the form of a dividend. Principal Financial Group pays out 24.9% 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. Symetra Financial has increased its dividend for 6 consecutive years. Principal Financial Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Principal Financial Group beats Symetra Financial on 10 of the 12 factors compared between the two stocks.

About Symetra Financial

Symetra Financial Corporation is a financial services company in the life insurance industry. The Company’s products are distributed domestically in all states and the District of Columbia through benefits consultants, financial institutions, broker-dealers and independent agents and advisers. It has three divisions: Benefits Division, Retirement Division and Individual Life Division. The Company’s Benefits Division provides medical stop-loss insurance, group life and disability income (DI) insurance, and limited benefit medical insurance as its principal products. The Company’s Retirement Division provides products that help its customers prepare for retirement and includes the Deferred Annuities and Income Annuities segments. The Company’s Individual Life division sells life insurance products.

About Principal Financial Group

Principal Financial Group, Inc. is an investment management company. The Company offers a range of financial products and services, including retirement, asset management and insurance. Its segments include Retirement and Income Solutions; Principal Global Investors, Principal International; U.S. Insurance Solutions, and Corporate. The Company offers a portfolio of products and services for retirement savings and retirement income. The Company’s Principal Global Investors segment manages assets for investors around the world. The Company offers pension accumulation products and services, mutual funds, asset management, income annuities and life insurance accumulation products. The Company’s U.S. Insurance Solutions segment provides group and individual insurance solutions. It focuses on small and medium-sized businesses, providing a range of retirement and employee benefit solutions, and individual insurance solutions to meet the needs of the business owners and their employees.

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