Financial Comparison: Aflac (AFL) and GWG Holdings (GWGH)

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

Analyst Ratings

This is a breakdown of recent ratings and price targets for Aflac and GWG Holdings, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Aflac 3 5 2 0 1.90
GWG Holdings 0 0 2 0 3.00

Aflac currently has a consensus target price of $77.33, suggesting a potential downside of 7.52%. GWG Holdings has a consensus target price of $14.50, suggesting a potential upside of 41.46%. Given GWG Holdings’ stronger consensus rating and higher probable upside, analysts plainly believe GWG Holdings is more favorable than Aflac.

Valuation and Earnings

This table compares Aflac and GWG Holdings’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Aflac $22.65 billion 1.46 $4.75 billion $6.63 12.61
GWG Holdings $62.55 million 0.95 -$15.50 million ($2.68) -3.82

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.

Insider & Institutional Ownership

65.6% of Aflac shares are held by institutional investors. Comparatively, 42.5% of GWG Holdings shares are held by institutional investors. 3.0% of Aflac shares are held by insiders. Comparatively, 77.4% of GWG Holdings shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Risk & Volatility

Aflac has a beta of 0.96, suggesting that its stock price is 4% less volatile than the S&P 500. Comparatively, GWG Holdings has a beta of 0.49, suggesting that its stock price is 51% less volatile than the S&P 500.

Profitability

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 11.98% 13.09% 2.05%
GWG Holdings -21.92% -184.34% 4.35%

Dividends

Aflac pays an annual dividend of $1.72 per share and has a dividend yield of 2.1%. 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.

Summary

Aflac beats GWG Holdings on 10 of the 15 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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