Reviewing Allianz (OTCMKTS:ALIZY) and Principal Financial Group (NASDAQ:PFG)

Principal Financial Group (NASDAQ:PFG) and Allianz (OTCMKTS:ALIZY) are both large-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, valuation, risk, institutional ownership, profitability and dividends.

Insider & Institutional Ownership

75.1% of Principal Financial Group shares are held by institutional investors. Comparatively, 0.0% of Allianz shares are held by institutional investors. 1.1% of Principal Financial Group shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent recommendations for Principal Financial Group and Allianz, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Principal Financial Group	1	7	2	0	2.10
Allianz	1	4	1	1	2.29

Principal Financial Group currently has a consensus price target of $94.22, suggesting a potential upside of 6.27%. Given Principal Financial Group’s higher possible upside, equities analysts plainly believe Principal Financial Group is more favorable than Allianz.

Valuation and Earnings

This table compares Principal Financial Group and Allianz”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Principal Financial Group	$15.63 billion	1.23	$1.19 billion	$5.27	16.82
Allianz	$211.45 billion	0.73	$12.19 billion	$3.14	12.85

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

Risk and Volatility

Principal Financial Group has a beta of 0.87, suggesting that its stock price is 13% less volatile than the S&P 500. Comparatively, Allianz has a beta of 0.62, suggesting that its stock price is 38% less volatile than the S&P 500.

Profitability

This table compares Principal Financial Group and Allianz’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Principal Financial Group	7.58%	16.09%	0.57%
Allianz	5.80%	17.50%	1.10%

Dividends

Principal Financial Group pays an annual dividend of $3.20 per share and has a dividend yield of 3.6%. Allianz pays an annual dividend of $1.17 per share and has a dividend yield of 2.9%. Principal Financial Group pays out 60.7% of its earnings in the form of a dividend. Allianz pays out 37.3% 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. Principal Financial Group has raised its dividend for 2 consecutive years. Principal Financial Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Principal Financial Group beats Allianz on 11 of the 18 factors compared between the two stocks.

About Principal Financial Group

Principal Financial Group, Inc. provides retirement, asset management, and insurance products and services to businesses, individuals, and institutional clients worldwide. The company operates through Retirement and Income Solutions, Principal Global Investors, Principal International, and U.S. Insurance Solutions segments. The Retirement and Income Solutions segment provides a portfolio of asset accumulation products and services for retirement savings and income. It offers products and services for defined contribution plans, including 401(k) and 403(b) plans, defined benefit pension plans, nonqualified executive benefit plans, employee stock ownership plans, equity compensation, and pension risk transfer services; individual retirement accounts; investment only products; and mutual funds, individual variable annuities, and bank products. The Principal Global Investors segment provides equity, fixed income, real estate, and other alternative investments, as well as asset allocation, stable value management, and other structured investment strategies. The Principal International segment offers pension accumulation products and services, mutual funds, asset management, income annuities, and life insurance accumulation products, as well as voluntary savings plans in Brazil, Chile, Mexico, China, Hong Kong Special Administrative Region, India, and Southeast Asia. The U.S. Insurance Solutions segment provides specialty benefits, such as group dental and vision insurance, group life insurance, and group and individual disability insurance, as well as administers group dental, disability, and vision benefits; and individual life insurance products comprising universal, variable universal, indexed universal, and term life insurance products in the United States. It also offers insurance solutions for small and medium-sized businesses and their owners, as well as executives. Principal Financial Group, Inc. was founded in 1879 and is based in Des Moines, Iowa.

About Allianz

Allianz SE, together with its subsidiaries, provides property-casualty insurance, life/health insurance, and asset management products and services worldwide. The company’s Property-Casualty segment offers various insurance products, including motor liability and own damage, accident, general liability, fire and property, legal expense, credit, and travel to private and corporate customers. Its Life/Health segment provides a range of life and health insurance products on an individual and a group basis, such as annuities, endowment and term insurance, and unit-linked and investment-oriented products, as well as private and supplemental health, and long-term care insurance products. The company’s Asset Management segment offers institutional and retail asset management products and services to third-party investors comprising equity and fixed income funds, and multi-assets; and alternative investment products that include real estate, infrastructure debt/equity, real assets, liquid alternatives, and solutions. Its Corporate and Other segment provides banking services for retail clients, as well as digital investment services. Allianz SE was founded in 1890 and is headquartered in Munich, Germany.