Prudential Financial (NYSE:PRU – Get Free Report) and Employers (NYSE:EIG – Get Free Report) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitability, dividends, institutional ownership, risk, valuation, earnings and analyst recommendations.
Insider & Institutional Ownership
56.8% of Prudential Financial shares are held by institutional investors. Comparatively, 80.5% of Employers shares are held by institutional investors. 0.1% of Prudential Financial shares are held by company insiders. Comparatively, 1.3% of Employers shares are held by company 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.
Valuation & Earnings
This table compares Prudential Financial and Employers”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Prudential Financial | $64.86 billion | 0.63 | $3.58 billion | $11.04 | 10.72 |
| Employers | $787.60 million | 1.05 | $10.80 million | $1.69 | 27.30 |
Prudential Financial has higher revenue and earnings than Employers. Prudential Financial is trading at a lower price-to-earnings ratio than Employers, indicating that it is currently the more affordable of the two stocks.
Dividends
Prudential Financial pays an annual dividend of $5.60 per share and has a dividend yield of 4.7%. Employers pays an annual dividend of $1.36 per share and has a dividend yield of 2.9%. Prudential Financial pays out 50.7% of its earnings in the form of a dividend. Employers pays out 80.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Prudential Financial has raised its dividend for 18 consecutive years and Employers has raised its dividend for 4 consecutive years. Prudential Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Risk & Volatility
Prudential Financial has a beta of 0.85, indicating that its share price is 15% less volatile than the S&P 500. Comparatively, Employers has a beta of 0.46, indicating that its share price is 54% less volatile than the S&P 500.
Analyst Ratings
This is a breakdown of recent recommendations and price targets for Prudential Financial and Employers, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Prudential Financial | 6 | 9 | 2 | 0 | 1.76 |
| Employers | 0 | 2 | 1 | 0 | 2.33 |
Prudential Financial presently has a consensus target price of $111.27, indicating a potential downside of 5.97%. Employers has a consensus target price of $59.00, indicating a potential upside of 27.86%. Given Employers’ stronger consensus rating and higher probable upside, analysts plainly believe Employers is more favorable than Prudential Financial.
Profitability
This table compares Prudential Financial and Employers’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Prudential Financial | 6.51% | 16.68% | 0.70% |
| Employers | 3.49% | 5.64% | 1.47% |
Summary
Prudential Financial beats Employers on 10 of the 17 factors compared between the two stocks.
About Prudential Financial
Prudential Financial, Inc., together with its subsidiaries, provides insurance, investment management, and other financial products and services in the United States and internationally. It operates through PGIM, Retirement Strategies, Group Insurance, Individual Life, and International Businesses segments. The PGIM segment offers investment management services and solutions related to public fixed income, public equity, real estate debt and equity, private credit and other alternatives, and multi-asset class strategies to institutional and retail clients, as well as its general account. The Retirement Strategies segment provides a range of retirement investment, and income products and services to retirement plan sponsors in the public, private, and not-for-profit sectors; develops and distributes individual variable and fixed annuity products. The Group Insurance segment offers various group life, and long-term and short-term group disability, as well as group corporate-, bank-, and trust-owned life insurance in the United States primarily for institutional clients for use in connection with employee and membership benefits plans; sells accidental death and dismemberment, and other supplemental health solutions; and plan administration services in connection with its insurance coverages. The Individual Life segment develops and distributes variable life, universal life, and term life insurance products. The International Businesses segment develops and distributes life insurance, retirement products, investment products, and certain accident and health products; and advisory services. The company provides its products and services to individual and institutional customers through its proprietary and third-party distribution networks. Prudential Financial, Inc. was founded in 1875 and is headquartered in Newark, New Jersey.
About Employers
Employers Holdings, Inc., through its subsidiaries, operates in the commercial property and casualty insurance industry primarily in the United States. The company operates in two segments, Employers and Cerity. It offers workers’ compensation insurance to small businesses in low to medium hazard industries under the Employers and Cerity brands. The company markets its products through local, regional, and national agents and brokers; alternative distribution channels; and national, regional, and local trade groups and associations, as well as directly to customers. Employers Holdings, Inc. was founded in 2000 and is based in Henderson, Nevada.
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