Fidelity and Guaranty Life (NYSE: FGL) and China Life Insurance Company Limited (NYSE:LFC) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, profitability, valuation, institutional ownership, dividends, risk and analyst recommendations.

Earnings & Valuation

This table compares Fidelity and Guaranty Life and China Life Insurance Company Limited’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Fidelity and Guaranty Life $1.14 billion 1.59 $97.00 million $3.29 9.41
China Life Insurance Company Limited $81.43 billion 1.22 $2.88 billion $0.53 33.17

China Life Insurance Company Limited has higher revenue and earnings than Fidelity and Guaranty Life. Fidelity and Guaranty Life is trading at a lower price-to-earnings ratio than China Life Insurance Company Limited, indicating that it is currently the more affordable of the two stocks.

Dividends

Fidelity and Guaranty Life pays an annual dividend of $0.26 per share and has a dividend yield of 0.8%. China Life Insurance Company Limited pays an annual dividend of $0.14 per share and has a dividend yield of 0.8%. Fidelity and Guaranty Life pays out 7.9% of its earnings in the form of a dividend. China Life Insurance Company Limited pays out 26.4% 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. China Life Insurance Company Limited has increased its dividend for 3 consecutive years. Fidelity and Guaranty Life is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Fidelity and Guaranty Life and China Life Insurance Company Limited, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Fidelity and Guaranty Life 0 2 0 0 2.00
China Life Insurance Company Limited 0 3 3 0 2.50

Fidelity and Guaranty Life presently has a consensus price target of $26.40, suggesting a potential downside of 14.70%. Given Fidelity and Guaranty Life’s higher probable upside, analysts plainly believe Fidelity and Guaranty Life is more favorable than China Life Insurance Company Limited.

Profitability

This table compares Fidelity and Guaranty Life and China Life Insurance Company Limited’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Fidelity and Guaranty Life 13.61% 8.00% 0.55%
China Life Insurance Company Limited 5.21% 10.32% 1.16%

Institutional and Insider Ownership

23.5% of Fidelity and Guaranty Life shares are held by institutional investors. Comparatively, 0.2% of China Life Insurance Company Limited shares are held by institutional investors. 0.6% of Fidelity and Guaranty Life 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.

Volatility and Risk

Fidelity and Guaranty Life has a beta of 0.88, meaning that its share price is 12% less volatile than the S&P 500. Comparatively, China Life Insurance Company Limited has a beta of 1.4, meaning that its share price is 40% more volatile than the S&P 500.

Summary

China Life Insurance Company Limited beats Fidelity and Guaranty Life on 9 of the 17 factors compared between the two stocks.

About Fidelity and Guaranty Life

Fidelity & Guaranty Life (FGL) is a holding company focused on obtaining controlling equity stakes in companies that operate across various industries. FGL’s primary business is the sale of individual life insurance products and annuities through independent agents, managing general agents, and specialty brokerage firms and in selected institutional markets. FGL’s principal products are deferred annuities (including fixed indexed annuity (FIA) contracts), immediate annuities and life insurance products. FGL markets products through its insurance subsidiaries, Fidelity & Guaranty Life Insurance Company (FGL Insurance) and Fidelity & Guaranty Life Insurance Company of New York (FGL NY Insurance). It distributes and services primarily fixed rate annuities, including FIAs. The Company provides FIA’s for pre-retirement wealth accumulation and post-retirement income management. Its life insurance provides wealth protection and transfer opportunities through indexed universal life products.

About China Life Insurance Company Limited

China Life Insurance Company Limited is a life insurance company. The Company provides a range of insurance products, including individual and group life insurance, health insurance and accident insurance products. It operates through three segments: Life Insurance, Health Insurance, and Accident Insurance. Its Life Insurance segment provides participating and non-participating life insurance and annuities to individuals and groups. Its Health Insurance segment provides short-term and long-term health insurance to individuals and groups. Its Accident Insurance segment provides short-term and long-term accident insurance to individuals and groups.

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