Lincoln National (NYSE: LNC) and Reinsurance Group of America (NYSE:RGA) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, institutional ownership, earnings, dividends, valuation, profitability and analyst recommendations.
Risk & Volatility
Lincoln National has a beta of 1.91, indicating that its stock price is 91% more volatile than the S&P 500. Comparatively, Reinsurance Group of America has a beta of 0.73, indicating that its stock price is 27% less volatile than the S&P 500.
Valuation & Earnings
This table compares Lincoln National and Reinsurance Group of America’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Lincoln National||$14.59 billion||1.03||$2.08 billion||$7.79||8.86|
|Reinsurance Group of America||$12.52 billion||0.75||$1.82 billion||$10.84||13.36|
Lincoln National has higher revenue and earnings than Reinsurance Group of America. Lincoln National is trading at a lower price-to-earnings ratio than Reinsurance Group of America, indicating that it is currently the more affordable of the two stocks.
This table compares Lincoln National and Reinsurance Group of America’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Reinsurance Group of America||14.01%||8.04%||1.17%|
This is a breakdown of recent recommendations for Lincoln National and Reinsurance Group of America, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Reinsurance Group of America||1||5||2||0||2.13|
Lincoln National currently has a consensus target price of $82.25, suggesting a potential upside of 19.20%. Reinsurance Group of America has a consensus target price of $158.63, suggesting a potential upside of 9.54%. Given Lincoln National’s stronger consensus rating and higher possible upside, equities analysts plainly believe Lincoln National is more favorable than Reinsurance Group of America.
Lincoln National pays an annual dividend of $1.32 per share and has a dividend yield of 1.9%. Reinsurance Group of America pays an annual dividend of $2.00 per share and has a dividend yield of 1.4%. Lincoln National pays out 16.9% of its earnings in the form of a dividend. Reinsurance Group of America pays out 18.5% 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. Lincoln National has raised its dividend for 7 consecutive years and Reinsurance Group of America has raised its dividend for 7 consecutive years. Lincoln National is clearly the better dividend stock, given its higher yield and lower payout ratio.
Insider & Institutional Ownership
80.5% of Lincoln National shares are held by institutional investors. Comparatively, 94.0% of Reinsurance Group of America shares are held by institutional investors. 1.1% of Lincoln National shares are held by insiders. Comparatively, 0.7% of Reinsurance Group of America shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Lincoln National beats Reinsurance Group of America on 11 of the 16 factors compared between the two stocks.
Lincoln National Company Profile
Lincoln National Corporation, through its subsidiaries, operates multiple insurance and retirement businesses in the United States. It operates through four segments: Annuities, Retirement Plan Services, Life Insurance, and Group Protection. The company sells a range of wealth protection, accumulation, and retirement income products and solutions. The company's products include fixed and indexed annuities, variable annuities, universal life insurance (UL), variable universal life insurance (VUL), linked-benefit UL, term life insurance, indexed universal life insurance, and employer-sponsored retirement plans and services, as well as group life, disability, and dental products. It also provides various plan investment vehicles, including individual and group variable annuities, group fixed annuities, and mutual fund-based programs; single and survivorship versions of UL and VUL, including corporate-owned UL and VUL, and bank-owned UL and VUL insurance products; and group non-medical insurance products, such as term life, universal life, disability, dental, vision, accident, and critical illness insurance to the employer market place through various forms of contributory and non-contributory plans. The company distributes its products through consultants, brokers, planners, agents, financial advisors, third-party administrators, and other intermediaries. Lincoln National Corporation was founded in 1904 and is headquartered in Radnor, Pennsylvania.
Reinsurance Group of America Company Profile
Reinsurance Group of America, Incorporated engages in reinsurance business. It offers individual and group life and health insurance products, including term life, credit life, universal life, whole life, group life and health, joint and last survivor insurance, critical illness, disability, and longevity products, as well as asset-intensive and financial reinsurance products. The company also provides reinsurance for mortality, morbidity, and lapse risk associated with products; and reinsurance for investment-related risks, as well as develops and markets technology solutions for the insurance industry. It serves life insurance companies in the United States, Latin America, Canada, Europe, the Middle East, Africa, and the Asia Pacific. Reinsurance Group of America, Incorporated was founded in 1973 and is headquartered in Chesterfield, Missouri.
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