Independence (NYSE:IHC) and Voya Financial (NYSE:VOYA) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, analyst recommendations, profitability, valuation, dividends, institutional ownership and earnings.

Institutional and Insider Ownership

18.4% of Independence shares are held by institutional investors. 7.0% of Independence shares are held by insiders. Comparatively, 1.7% of Voya Financial shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Independence and Voya Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Independence 8.48% 6.74% 2.90%
Voya Financial 5.64% 8.45% 0.49%

Dividends

Independence pays an annual dividend of $0.30 per share and has a dividend yield of 0.8%. Voya Financial pays an annual dividend of $0.04 per share and has a dividend yield of 0.1%. Voya Financial pays out 1.0% of its earnings in the form of a dividend. Independence has increased its dividend for 7 consecutive years. Independence is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares Independence and Voya Financial’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Independence $350.77 million 1.53 $28.48 million N/A N/A
Voya Financial $8.51 billion 0.89 $875.00 million $4.04 13.06

Voya Financial has higher revenue and earnings than Independence.

Volatility & Risk

Independence has a beta of 0.26, suggesting that its share price is 74% less volatile than the S&P 500. Comparatively, Voya Financial has a beta of 1.48, suggesting that its share price is 48% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations for Independence and Voya Financial, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Independence 0 0 0 0 N/A
Voya Financial 1 1 5 0 2.57

Voya Financial has a consensus target price of $58.00, suggesting a potential upside of 9.93%. Given Voya Financial’s higher possible upside, analysts clearly believe Voya Financial is more favorable than Independence.

Summary

Independence beats Voya Financial on 9 of the 15 factors compared between the two stocks.

Independence Company Profile

Independence Holding Company, through its subsidiaries, engages in life and health insurance business. The company's dental portfolio includes indemnity and PPO plans for employer groups of two or more lives, and for individuals within affinity groups; vision plans that offer a flat reimbursement amount for exams and materials; and short-term medical products for people with temporary needs for health coverage. It also provides supplemental products, including hospital indemnity, fixed indemnity limited benefit, critical illness, accident medical coverage, and life insurance products to individuals and families; and pet insurance and occupational accident insurance products. In addition, the company offers group long-term and short-term disability products to employers that provide benefit to their employees; New York short-term disability plan that offers temporary cash payments to replace wages lost; and group term life products, such as group term life, accidental death and dismemberment (AD&D), supplemental life and AD&D, and dependent life products. Independence Holding Company markets its products through general agents, independent brokers, and independent producers in 50 states of the United States, the District of Columbia, the Virgin Islands, and Puerto Rico. The company was founded in 1980 and is headquartered in Stamford, Connecticut.

Voya Financial Company Profile

Voya Financial, Inc. operates as a retirement, investment, and employee benefits company in the United States. It operates through four segments: Retirement, Investment Management, Employee Benefits, and Individual Life. The Retirement segment offers tax-deferred employer-sponsored retirement savings plans and administrative services; and individual retirement accounts, and other retail financial products and financial services, as well as financial planning and advisory services. This segment serves corporate, education, healthcare, and other non-profit and government entities, as well as institutional and individual customers. The Investment Management segment provides fixed income, equity, multi-asset, and alternative products and solutions to individual investors and institutional clients through its direct sales force, consultant channel, banks, broker-dealers, and independent financial advisers. The Employee Benefits segment offers stop loss, group life, voluntary employee-paid, and disability products through consultants, brokers, third-party administrators, enrollment firms, and technology partners to mid-sized and large businesses. The Individual Life segment provides wealth protection and transfer opportunities through universal, variable, and term life products. The company was formerly known as ING U.S., Inc. and changed its name to Voya Financial, Inc. in April 2014. Voya Financial, Inc. was incorporated in 1999 and is based in New York, New York.

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