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

Profitability

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

Net Margins Return on Equity Return on Assets
National Western Life Group 13.10% 5.33% 0.78%
Primerica 14.41% 18.48% 1.97%

Dividends

National Western Life Group pays an annual dividend of $0.36 per share and has a dividend yield of 0.1%. Primerica pays an annual dividend of $0.80 per share and has a dividend yield of 1.0%. National Western Life Group pays out 1.2% of its earnings in the form of a dividend. Primerica pays out 16.3% 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. Primerica has increased its dividend for 6 consecutive years. Primerica is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

National Western Life Group has a beta of 1.45, meaning that its stock price is 45% more volatile than the S&P 500. Comparatively, Primerica has a beta of 1.14, meaning that its stock price is 14% more volatile than the S&P 500.

Institutional & Insider Ownership

79.0% of National Western Life Group shares are owned by institutional investors. Comparatively, 94.9% of Primerica shares are owned by institutional investors. 1.0% of National Western Life Group shares are owned by insiders. Comparatively, 0.9% of Primerica shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for National Western Life Group and Primerica, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
National Western Life Group 0 0 0 0 N/A
Primerica 0 4 1 0 2.20

Primerica has a consensus target price of $84.67, indicating a potential upside of 10.17%. Given Primerica’s higher possible upside, analysts plainly believe Primerica is more favorable than National Western Life Group.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
National Western Life Group $788.97 million 1.48 $171.25 million $30.07 11.33
Primerica $1.62 billion 2.13 $411.75 million $4.90 15.68

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

Summary

Primerica beats National Western Life Group on 12 of the 16 factors compared between the two stocks.

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.

Primerica Company Profile

Primerica Inc. (Primerica) is a distributor of financial products to middle-income households in the United States and Canada. The Company operates through three segments: Term Life Insurance, Investment and Savings Products, and Corporate and Other Distributed Products. The Term Life Insurance segment includes underwriting profits on its in-force book of term life insurance policies, net of reinsurance, which are underwritten by its life insurance company subsidiaries. The Investment and Savings Products segment includes retail and managed mutual funds, and annuities distributed through licensed broker-dealer subsidiaries and includes segregated funds, an individual annuity savings product that it underwrites in Canada through Primerica Life Insurance Company of Canada (Primerica Life Canada). In the United States, it distributes mutual fund and annuity products of various third-party companies. It also earns fees for account servicing on a subset of the mutual funds it distributes.

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