Manulife Financial (NYSE:MFC) and AFLAC (AFL) Head to Head Analysis

AFLAC (NYSE: AFL) and Manulife Financial (NYSE:MFC) are both large-cap financials companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, earnings, analyst recommendations, valuation, dividends, risk and profitability.

Analyst Ratings

This is a summary of recent ratings and recommmendations for AFLAC and Manulife Financial, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AFLAC 3 7 2 0 1.92
Manulife Financial 0 1 0 0 2.00

AFLAC presently has a consensus target price of $78.60, indicating a potential downside of 10.62%. Manulife Financial has a consensus target price of $27.00, indicating a potential upside of 29.12%. Given Manulife Financial’s stronger consensus rating and higher possible upside, analysts plainly believe Manulife Financial is more favorable than AFLAC.

Risk and Volatility

AFLAC has a beta of 1.02, indicating that its share price is 2% more volatile than the S&P 500. Comparatively, Manulife Financial has a beta of 1.33, indicating that its share price is 33% more volatile than the S&P 500.

Insider & Institutional Ownership

65.4% of AFLAC shares are owned by institutional investors. Comparatively, 46.6% of Manulife Financial shares are owned by institutional investors. 3.0% of AFLAC shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

AFLAC pays an annual dividend of $1.80 per share and has a dividend yield of 2.0%. Manulife Financial pays an annual dividend of $0.64 per share and has a dividend yield of 3.1%. AFLAC pays out 26.1% of its earnings in the form of a dividend. Manulife Financial pays out 45.7% 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. AFLAC has raised its dividend for 3 consecutive years and Manulife Financial has raised its dividend for 34 consecutive years. Manulife Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares AFLAC and Manulife Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AFLAC 12.49% 12.87% 2.03%
Manulife Financial N/A 11.55% 0.64%

Earnings and Valuation

This table compares AFLAC and Manulife Financial’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
AFLAC $22.56 billion 1.53 $2.66 billion $6.89 12.76
Manulife Financial $40.27 billion 1.03 $2.26 billion $1.40 14.94

AFLAC has higher earnings, but lower revenue than Manulife Financial. AFLAC is trading at a lower price-to-earnings ratio than Manulife Financial, indicating that it is currently the more affordable of the two stocks.

Summary

AFLAC beats Manulife Financial on 11 of the 17 factors compared between the two stocks.

About AFLAC

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.

About Manulife Financial

Manulife Financial Corporation (MFC) is a holding company of The Manufacturers Life Insurance Company (MLI), which is a life insurance company, and John Hancock Reassurance Company Ltd. (JHRECO), which is a reinsurance company. The Company operates as a financial services company with principal operations in Asia, Canada and the United States. The Company’s segments include Asia Division, Canadian Division, U.S. Division, and the Corporate and Other. The Company operates as Manulife in Canada and Asia and primarily as John Hancock in the United States. The product and service offerings under its Asia, Canadian and U.S. Divisions include Protection, Wealth and Asset Management, and Other Wealth. The Corporate and Other segment includes external asset management business, Property and Casualty (P&C) Reinsurance Business, and run-off reinsurance operations, including variable annuities, and accident and health.

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