Analyzing Prudential Financial (PRU) and Emergent Capital (EMGC)

Prudential Financial (NYSE: PRU) and Emergent Capital (OTCMKTS:EMGC) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, dividends, profitability, analyst recommendations, earnings, valuation and risk.

Analyst Ratings

This is a summary of recent ratings and price targets for Prudential Financial and Emergent Capital, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Prudential Financial 0 4 10 0 2.71
Emergent Capital 0 0 1 0 3.00

Prudential Financial presently has a consensus price target of $115.09, indicating a potential upside of 20.75%. Given Prudential Financial’s higher probable upside, equities analysts clearly believe Prudential Financial is more favorable than Emergent Capital.

Dividends

Prudential Financial pays an annual dividend of $3.60 per share and has a dividend yield of 3.8%. Emergent Capital does not pay a dividend. Prudential Financial pays out 34.0% of its earnings in the form of a dividend. Prudential Financial has increased its dividend for 9 consecutive years.

Risk & Volatility

Prudential Financial has a beta of 1.46, indicating that its stock price is 46% more volatile than the S&P 500. Comparatively, Emergent Capital has a beta of -0.12, indicating that its stock price is 112% less volatile than the S&P 500.

Valuation & Earnings

This table compares Prudential Financial and Emergent Capital’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Prudential Financial $53.65 billion 0.75 $7.86 billion $10.58 9.01
Emergent Capital $51.87 million 0.94 -$3.50 million N/A N/A

Prudential Financial has higher revenue and earnings than Emergent Capital.

Profitability

This table compares Prudential Financial and Emergent Capital’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Prudential Financial 13.57% 9.25% 0.58%
Emergent Capital -42.49% -4.22% -1.28%

Institutional & Insider Ownership

64.4% of Prudential Financial shares are held by institutional investors. Comparatively, 0.4% of Emergent Capital shares are held by institutional investors. 0.6% of Prudential Financial shares are held by company insiders. Comparatively, 33.3% of Emergent Capital shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

Prudential Financial beats Emergent Capital on 11 of the 15 factors compared between the two stocks.

Prudential Financial Company Profile

Prudential Financial, Inc., through its subsidiaries, provides insurance, investment management, and other financial products and services in the United States and internationally. It operates through U.S. Individual Solutions, U.S. Workplace Solutions, Investment Management, and International Insurance divisions. The U.S. Individual Solutions division offers individual variable and fixed annuity products to the mass affluent and affluent markets. It also provides universal, term, variable, and other life insurance products to the mass middle, mass affluent, and affluent markets. The U.S. Workplace Solutions division provides recordkeeping, plan administration, actuarial advisory, tailored participant education and communication, trustee, institutional and retail investment, and brokerage services, as well as institutional investment products to the payout annuity and stable value markets. It also provides group life; long-term and short-term group disability; and group corporate-, bank-, and trust-owned life insurance to institutional clients for employee plans and affinity groups, as well as accidental death, dismemberment, other ancillary coverage, and plan administrative services. The Investment Management division offers asset management services, such as institutional portfolio and retail funds management, private lending and asset securitization, and other structured products for public and private fixed income, public equity, and real estate, as well as commercial mortgage origination and servicing, mutual funds, and other retail services. The International Insurance division provides individual and group life insurance, retirement, and related products, as well as reinsurance products. The company offers 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.

Emergent Capital Company Profile

Emergent Capital, Inc., a specialty finance company, invests in life settlements. As of December 31, 2017, it owned a portfolio of 608 life insurance policies. The company was formerly known as Imperial Holdings, Inc. and changed its name to Emergent Capital, Inc. in September 2015. Emergent Capital, Inc. was founded in 2006 and is based in Boca Raton, Florida.

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