Manulife Financial (OTCMKTS: HVRRY) and HANNOVER RUECK/S (OTCMKTS:HVRRY) are both large-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, analyst recommendations, risk, dividends, earnings, institutional ownership and profitability.

Risk & Volatility

Manulife Financial has a beta of 1.28, indicating that its stock price is 28% more volatile than the S&P 500. Comparatively, HANNOVER RUECK/S has a beta of 1.06, indicating that its stock price is 6% more volatile than the S&P 500.

Institutional and Insider Ownership

46.1% of Manulife Financial shares are owned by institutional investors. Comparatively, 0.1% of HANNOVER RUECK/S shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Dividends

Manulife Financial pays an annual dividend of $0.68 per share and has a dividend yield of 3.7%. HANNOVER RUECK/S pays an annual dividend of $1.51 per share and has a dividend yield of 2.1%. Manulife Financial pays out 39.8% of its earnings in the form of a dividend. HANNOVER RUECK/S pays out 33.6% 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. Manulife Financial has raised its dividend for 4 consecutive years. Manulife Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Manulife Financial and HANNOVER RUECK/S’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Manulife Financial 4.22% 12.69% 0.69%
HANNOVER RUECK/S 5.54% 11.20% 1.63%

Analyst Recommendations

This is a breakdown of current recommendations for Manulife Financial and HANNOVER RUECK/S, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Manulife Financial 0 2 4 0 2.67
HANNOVER RUECK/S 0 1 1 0 2.50

Manulife Financial currently has a consensus price target of $28.50, indicating a potential upside of 53.72%. Given Manulife Financial’s stronger consensus rating and higher probable upside, analysts clearly believe Manulife Financial is more favorable than HANNOVER RUECK/S.

Earnings and Valuation

This table compares Manulife Financial and HANNOVER RUECK/S’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Manulife Financial $44.97 billion 0.82 $1.60 billion $1.71 10.84
HANNOVER RUECK/S $19.66 billion 0.86 $1.08 billion $4.49 15.68

Manulife Financial has higher revenue and earnings than HANNOVER RUECK/S. Manulife Financial is trading at a lower price-to-earnings ratio than HANNOVER RUECK/S, indicating that it is currently the more affordable of the two stocks.

Summary

Manulife Financial beats HANNOVER RUECK/S on 10 of the 16 factors compared between the two stocks.

About Manulife Financial

Manulife Financial Corporation, together with its subsidiaries, provides financial advice, insurance, and wealth and asset management solutions for individuals, groups, and institutions in Asia, Canada, and the United States. The company offers individual life, and individual and group long-term care insurance through insurance agents, brokers, banks, financial planners, and direct marketing. It also provides pension contracts and mutual fund products and services; various retirement products to group benefit plans; and annuities, single premium, and banking products, such as deposit and credit products to Canadian customers, as well as non-guaranteed, partially guaranteed, and fully guaranteed investment options through general and separate account products. It distributes wealth and asset management products through insurance agents and brokers affiliated with the company, securities brokerage firms, financial planners, pension plan sponsors, pension plan consultants, and banks. In addition, the company is involved in the asset management business; property and casualty insurance and reinsurance businesses; and run-off reinsurance operations, including variable annuities, and accident and health. Further, it manages timberland and agricultural portfolios; and insurance agency, investment counseling, portfolio and mutual fund management, mutual fund dealer, life and financial reinsurance, and mutual funds marketing businesses, as well as investment management, advisory, and dealer activities. Additionally, the company holds and manages oil and gas properties; holds oil and gas royalties, and foreign bonds and equities; and develops and operates hydro-electric power projects. Manulife Financial Corporation was founded in 1887 and is headquartered in Toronto, Canada.

About HANNOVER RUECK/S

Hannover Rück SE, together with its subsidiaries, provides reinsurance products and services worldwide. It operates through Property & Casualty Reinsurance, and Life & Health Reinsurance segments. The Property & Casualty Reinsurance segment offers specialty lines comprising marine, aviation, facultative, credit, surety, and political risks reinsurance products; and treaty, catastrophe XL, and structured reinsurance, as well as insurance-linked securities. This segment also provides risk solutions for casualty and property, as well as for agricultural, livestock, and bloodstock businesses; aviation and space business; and marine and offshore energy business. The Life & Health Reinsurance segment offers, enhanced annuities, group life and health, guaranteed simplified issue, 60+, and Sharia-compliant Takaful reinsurance products, as well as micro insurance products. This segment also provides risk solutions in the areas of critical illness, disability, health, longevity, long term care, and mortality. In addition, it offers various financial solutions, including new-business financing; monetization of embedded value; reserve and solvency relief; and divestiture of non-core businesses. The company was formerly known as Hannover Rückversicherung AG and changed its name to Hannover Rück SE in March 2013. The company was founded in 1966 and is based in Hanover, Germany. Hannover Rück SE is a subsidiary of Talanx AG.

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