Aflac (NYSE: AFL) and GWG Holdings (NASDAQ:GWGH) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, risk, institutional ownership, dividends, profitability, earnings and valuation.
Volatility and Risk
Aflac has a beta of 0.96, meaning that its stock price is 4% less volatile than the S&P 500. Comparatively, GWG Holdings has a beta of 0.49, meaning that its stock price is 51% less volatile than the S&P 500.
Valuation and Earnings
This table compares Aflac and GWG Holdings’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Aflac||$22.65 billion||1.47||$4.75 billion||$6.63||12.70|
|GWG Holdings||$62.55 million||0.94||-$15.50 million||($2.68)||-3.80|
Aflac has higher revenue and earnings than GWG Holdings. GWG Holdings is trading at a lower price-to-earnings ratio than Aflac, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
65.6% of Aflac shares are owned by institutional investors. Comparatively, 42.5% of GWG Holdings shares are owned by institutional investors. 3.0% of Aflac shares are owned by insiders. Comparatively, 77.4% of GWG Holdings shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
This table compares Aflac and GWG Holdings’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Aflac pays an annual dividend of $1.72 per share and has a dividend yield of 2.0%. GWG Holdings does not pay a dividend. Aflac pays out 25.9% of its earnings in the form of a dividend. Aflac has raised its dividend for 34 consecutive years.
This is a summary of recent ratings and target prices for Aflac and GWG Holdings, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Aflac presently has a consensus price target of $77.33, indicating a potential downside of 8.13%. GWG Holdings has a consensus price target of $14.50, indicating a potential upside of 42.21%. Given GWG Holdings’ stronger consensus rating and higher probable upside, analysts clearly believe GWG Holdings is more favorable than Aflac.
Aflac beats GWG Holdings on 11 of the 16 factors compared between the two stocks.
Aflac Company Profile
Aflac Incorporated is a business holding company. The Company is involved in supplemental health and life insurance, which is marketed and administered through its subsidiary, American Family Life Assurance Company of Columbus (Aflac). The Company’s insurance business consists of two segments: Aflac Japan and Aflac U.S. The Company designs the United States insurance products to provide supplemental coverage for people having medical or primary insurance coverage. Aflac U.S. offers accident coverage on both an individual and group basis. The Company offers cancer plans, critical illness plans, and critical care and recovery plans. The Company designs the United States insurance products to provide supplemental coverage for people having medical or primary insurance coverage. Aflac U.S. offers accident coverage on both an individual and group basis. The Company offers cancer plans, critical illness plans, and critical care and recovery plans.
GWG Holdings Company Profile
GWG Holdings, Inc. is the parent company of GWG Life, is a financial services company. The Company is focused on transforming the life insurance industry through its products and services. The Company has developed a new suite of options for the life insurance secondary market called LifeCare Xchange (LCX). This new capability provides seniors with the exchange value of their life insurance policies they can apply to long-term care and other post-retirement needs. Through its subsidiary GWG Life, LLC, seeks to further transform the industry by applying proprietary M-Panel epigenetic technology to disrupt traditional life insurance underwriting practices.
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