Torchmark Corporation (NYSE: TMK) and National Western Life Group (NASDAQ:NWLI) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, institutional ownership, risk, dividends, valuation and earnings.

Volatility & Risk

Torchmark Corporation has a beta of 1, meaning that its share price has a similar volatility profile to the S&P 500.Comparatively, National Western Life Group has a beta of 1.47, meaning that its share price is 47% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Torchmark Corporation and National Western Life Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Torchmark Corporation 3 3 0 0 1.50
National Western Life Group 0 0 0 0 N/A

Torchmark Corporation currently has a consensus price target of $70.40, indicating a potential downside of 12.35%. Given Torchmark Corporation’s higher probable upside, analysts clearly believe Torchmark Corporation is more favorable than National Western Life Group.

Profitability

This table compares Torchmark Corporation and National Western Life Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Torchmark Corporation 13.96% 11.55% 2.55%
National Western Life Group 13.10% 5.33% 0.78%

Dividends

Torchmark Corporation pays an annual dividend of $0.60 per share and has a dividend yield of 0.7%. National Western Life Group pays an annual dividend of $0.36 per share and has a dividend yield of 0.1%. Torchmark Corporation pays out 12.9% of its earnings in the form of a dividend. National Western Life Group pays out 1.2% 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. National Western Life Group has raised its dividend for 7 consecutive years.

Insider and Institutional Ownership

71.9% of Torchmark Corporation shares are owned by institutional investors. Comparatively, 79.0% of National Western Life Group shares are owned by institutional investors. 3.8% of Torchmark Corporation shares are owned by company insiders. Comparatively, 1.0% of National Western Life Group shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Torchmark Corporation and National Western Life Group’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Torchmark Corporation $4.02 billion 2.32 $864.53 million $4.66 17.24
National Western Life Group $788.97 million 1.55 $171.25 million $30.07 11.83

Torchmark Corporation has higher revenue and earnings than National Western Life Group. National Western Life Group is trading at a lower price-to-earnings ratio than Torchmark Corporation, indicating that it is currently the more affordable of the two stocks.

Summary

Torchmark Corporation beats National Western Life Group on 10 of the 15 factors compared between the two stocks.

Torchmark Corporation Company Profile

Torchmark Corporation (Torchmark) is an insurance holding company. The Company, through its subsidiaries, provides a range of life and health insurance products and annuities to a base of customers. The Company’s segments include life insurance, health insurance, annuities and investment. The life insurance segment includes traditional and interest-sensitive whole life insurance as well as term life insurance. The Health insurance products are guaranteed-renewable and include Medicare Supplement, critical illness, accident and limited-benefit supplemental hospital and surgical coverage’s. Annuities include fixed-benefit contracts. The Company markets its insurance products through various distribution channels, each of which sells the products of its insurance segments. Its subsidiaries include American Income Life Insurance Company (American Income) and Liberty National Life Insurance Company (Liberty National).

National Western Life Group Company Profile

National Western Life Insurance Company (National Western) is a stock life insurance company. The Company operates in two segments: Domestic Insurance Operations and International Insurance Operations. The products marketed under domestic insurance operations are annuities, universal life insurance and traditional life insurance, which include both term and whole life products. National Western’s international operations focus on foreign nationals in upper socioeconomic classes. The Company provides life insurance products for the savings and protection needs of approximately 126,700 policyholders and for the asset accumulation and retirement needs of 139,100 annuity contract holders. National Western offers a portfolio of individual whole life, universal life and term insurance plans, and annuities, including supplementary riders.

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