Head to Head Comparison: GWG Holdings (GWGH) and CNO Financial Group (CNO)

GWG Holdings (NASDAQ: GWGH) and CNO Financial Group (NYSE:CNO) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, dividends, valuation, analyst recommendations, institutional ownership, profitability and earnings.

Volatility & Risk

GWG Holdings has a beta of 0.51, meaning that its stock price is 49% less volatile than the S&P 500. Comparatively, CNO Financial Group has a beta of 1.21, meaning that its stock price is 21% more volatile than the S&P 500.

Dividends

CNO Financial Group pays an annual dividend of $0.36 per share and has a dividend yield of 1.6%. GWG Holdings does not pay a dividend. CNO Financial Group pays out 15.7% of its earnings in the form of a dividend. GWG Holdings has increased its dividend for 4 consecutive years.

Earnings and Valuation

This table compares GWG Holdings and CNO Financial Group’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
GWG Holdings $62.55 million 0.95 -$15.50 million ($2.68) -3.82
CNO Financial Group $4.15 billion 0.91 $935.40 million $2.29 9.77

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

Profitability

This table compares GWG Holdings and CNO Financial Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
GWG Holdings -21.92% -184.34% 4.35%
CNO Financial Group 9.61% 5.74% 0.81%

Analyst Ratings

This is a breakdown of current recommendations for GWG Holdings and CNO Financial Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
GWG Holdings 0 0 2 0 3.00
CNO Financial Group 1 6 1 0 2.00

GWG Holdings presently has a consensus target price of $14.50, indicating a potential upside of 41.46%. CNO Financial Group has a consensus target price of $20.50, indicating a potential downside of 8.40%. Given GWG Holdings’ stronger consensus rating and higher probable upside, research analysts plainly believe GWG Holdings is more favorable than CNO Financial Group.

Insider & Institutional Ownership

42.5% of GWG Holdings shares are held by institutional investors. Comparatively, 95.4% of CNO Financial Group shares are held by institutional investors. 77.4% of GWG Holdings shares are held by insiders. Comparatively, 2.0% of CNO Financial Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

CNO Financial Group beats GWG Holdings on 9 of the 17 factors compared between the two stocks.

About GWG Holdings

GWG Holdings, Inc. is the parent company of GWG Life, is a financial services company. The Company is a financial purchaser of life insurance assets in the secondary market. It creates opportunities for consumers owning life insurance to obtain value for their policies as compared to the traditional options offered by insurance companies. It also creates opportunities for investors to participate in alternative asset classes, such as life insurance, not correlated to traditional financial markets. Through its subsidiary GWG Life, LLC, it has developed an option for the life insurance secondary market called LifeCare Xchange (LCX). It provides seniors with the exchange value of their life insurance policies they can apply to long-term care and other post-retirement needs. It generally purchases life insurance assets directly from policy owners having purchased their life insurance in the primary market.

About CNO Financial Group

CNO Financial Group, Inc. is a holding company for a group of insurance companies operating throughout the United States that develops, markets and administers health insurance, annuity, individual life insurance and other insurance products. The Company’s segments include Bankers Life, Washington National and Colonial Penn. It sells health insurance, annuity, individual life insurance and other insurance products through three primary distribution channels: career agents, independent producers and direct marketing. The Company offers products in various categories, including health, annuities and life insurance. The health products include Medicare supplement, long-term care, prescription drug plan and Medicare advantage, supplemental health products and other health products. The annuities products include fixed index annuities and other fixed interest annuities. The life insurance products include interest-sensitive life products and traditional life products.

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