Globe Life (NYSE:GL) and Primerica (NYSE:PRI) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their institutional ownership, risk, dividends, profitability, analyst recommendations, earnings and valuation.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Globe Life and Primerica, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Globe Life 0 0 0 0 N/A
Primerica 1 0 1 0 2.00

Primerica has a consensus target price of $128.00, indicating a potential upside of 1.96%. Given Primerica’s higher probable upside, analysts clearly believe Primerica is more favorable than Globe Life.

Valuation and Earnings

This table compares Globe Life and Primerica’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Globe Life $4.30 billion 2.41 $701.47 million $6.13 15.49
Primerica $1.90 billion 2.80 $324.09 million $7.33 17.13

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

Institutional & Insider Ownership

75.6% of Globe Life shares are held by institutional investors. Comparatively, 89.7% of Primerica shares are held by institutional investors. 3.6% of Globe Life shares are held by company insiders. Comparatively, 0.8% of Primerica shares are held 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.

Dividends

Globe Life pays an annual dividend of $0.69 per share and has a dividend yield of 0.7%. Primerica pays an annual dividend of $1.36 per share and has a dividend yield of 1.1%. Globe Life pays out 11.3% of its earnings in the form of a dividend. Primerica pays out 18.6% 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. Primerica has increased its dividend for 8 consecutive years. Primerica is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Globe Life and Primerica’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Globe Life 16.26% 12.34% 3.06%
Primerica 17.66% 22.77% 2.65%

Risk and Volatility

Globe Life has a beta of 0.95, meaning that its share price is 5% less volatile than the S&P 500. Comparatively, Primerica has a beta of 1.38, meaning that its share price is 38% more volatile than the S&P 500.

Summary

Primerica beats Globe Life on 11 of the 16 factors compared between the two stocks.

Globe Life Company Profile

Globe Life Inc., through its subsidiaries, provides various life and supplemental health insurance products, and annuities to lower middle to middle income households in the United States. The company operates through four segments: Life Insurance, Supplemental Health Insurance, Annuities, and Investments. It offers term life, whole life, children's life, senior life, and family life insurance products; accidental benefits insurance; mortgage protection insurance; and medicare supplement plans. The company was formerly known as Torchmark Corporation and changed its name to Globe Life Inc. in August 2019. Globe Life Inc. is based in McKinney, Texas.

Primerica Company Profile

Primerica, Inc., together with its subsidiaries, provides financial products to middle income households in the United States and Canada. The company operates in three segments: Term Life Insurance; Investment and Savings Products; and Corporate and Other Distributed Products. It underwrites individual term life insurance products. The company also provides mutual funds and various retirement plans, managed investments, variable and fixed annuities, fixed indexed annuities, and segregated funds. In addition, it offers auto and homeowners' insurance, home automation solutions, and mortgage loan referrals; ID theft defense services; and insurance products, including supplemental medical and dental, accidental death, and disability for small businesses. Further, the company provides prepaid legal services that assist subscribers with legal matters, such as drafting wills, living wills and powers of attorney, trial defense, and motor vehicle-related matters. The company distributes and sells its products through licensed sales representatives. Primerica, Inc. was founded in 1927 and is headquartered in Duluth, Georgia.

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