Cincinnati Financial (NASDAQ:CINF – Get Free Report) and Globe Life (NYSE:GL – Get Free Report) are both large-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, earnings, valuation, institutional ownership, risk, profitability and analyst recommendations.
Insider and Institutional Ownership
65.2% of Cincinnati Financial shares are held by institutional investors. Comparatively, 81.6% of Globe Life shares are held by institutional investors. 2.9% of Cincinnati Financial shares are held by company insiders. Comparatively, 2.1% of Globe Life shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Profitability
This table compares Cincinnati Financial and Globe Life’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Cincinnati Financial | 20.07% | 9.48% | 3.64% |
| Globe Life | 18.89% | 19.51% | 3.91% |
Analyst Recommendations
This is a breakdown of current ratings and recommmendations for Cincinnati Financial and Globe Life, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Cincinnati Financial | 0 | 3 | 1 | 1 | 2.60 |
| Globe Life | 0 | 3 | 7 | 1 | 2.82 |
Cincinnati Financial presently has a consensus price target of $191.60, suggesting a potential upside of 0.96%. Globe Life has a consensus price target of $181.50, suggesting a potential upside of 12.11%. Given Globe Life’s stronger consensus rating and higher possible upside, analysts clearly believe Globe Life is more favorable than Cincinnati Financial.
Earnings and Valuation
This table compares Cincinnati Financial and Globe Life”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Cincinnati Financial | $12.63 billion | 2.31 | $2.39 billion | $17.05 | 11.13 |
| Globe Life | $6.27 billion | 1.95 | $1.16 billion | $14.95 | 10.83 |
Cincinnati Financial has higher revenue and earnings than Globe Life. Globe Life is trading at a lower price-to-earnings ratio than Cincinnati Financial, indicating that it is currently the more affordable of the two stocks.
Dividends
Cincinnati Financial pays an annual dividend of $3.76 per share and has a dividend yield of 2.0%. Globe Life pays an annual dividend of $1.32 per share and has a dividend yield of 0.8%. Cincinnati Financial pays out 22.1% of its earnings in the form of a dividend. Globe Life pays out 8.8% 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. Cincinnati Financial has increased its dividend for 65 consecutive years and Globe Life has increased its dividend for 20 consecutive years. Cincinnati Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Risk and Volatility
Cincinnati Financial has a beta of 0.48, indicating that its share price is 52% less volatile than the S&P 500. Comparatively, Globe Life has a beta of 0.47, indicating that its share price is 53% less volatile than the S&P 500.
Summary
Cincinnati Financial beats Globe Life on 10 of the 17 factors compared between the two stocks.
About Cincinnati Financial
Cincinnati Financial Corporation is an insurance holding company founded in 1950 and headquartered in Fairfield, Ohio. Its principal subsidiary, The Cincinnati Insurance Company, provides property and casualty insurance to businesses and individuals. The company offers commercial and personal insurance through independent insurance agencies, along with specialty coverage for risks that may not fit standard insurance programs. Its other operations include life insurance, reinsurance and investment management.
About Globe Life
Globe Life Inc. is a U.S.-based insurance holding company that provides life and supplemental health insurance through its subsidiaries. Its products include term and whole life insurance, Medicare Supplement insurance, and supplemental health coverage such as accident, cancer, and critical illness policies. The company distributes insurance through a mix of exclusive agents, independent agents, and direct marketing. Its operating companies include Globe Life and Accident Insurance Company, American Income Life, Liberty National, Family Heritage Life, and United American.
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