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

Institutional & Insider Ownership

18.8% of Independence shares are owned by institutional investors. Comparatively, 75.6% of Metlife shares are owned by institutional investors. 7.0% of Independence shares are owned by company insiders. Comparatively, 0.3% of Metlife shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Independence and Metlife, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Independence 0 0 0 0 N/A
Metlife 1 4 5 0 2.40

Metlife has a consensus target price of $49.45, suggesting a potential upside of 2.24%. Given Metlife’s higher possible upside, analysts clearly believe Metlife is more favorable than Independence.

Profitability

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

Net Margins Return on Equity Return on Assets
Independence 8.27% 6.65% 2.88%
Metlife 9.28% 9.75% 0.78%

Dividends

Independence pays an annual dividend of $0.40 per share and has a dividend yield of 1.0%. Metlife pays an annual dividend of $1.76 per share and has a dividend yield of 3.6%. Metlife pays out 32.7% of its earnings in the form of a dividend. Independence has raised its dividend for 7 consecutive years and Metlife has raised its dividend for 6 consecutive years.

Valuation and Earnings

This table compares Independence and Metlife’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 1.63 $28.48 million N/A N/A
Metlife $67.94 billion 0.67 $5.12 billion $5.39 8.97

Metlife has higher revenue and earnings than Independence.

Volatility and Risk

Independence has a beta of 0.21, suggesting that its stock price is 79% less volatile than the S&P 500. Comparatively, Metlife has a beta of 1.11, suggesting that its stock price is 11% more volatile than the S&P 500.

Summary

Metlife beats Independence 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.

Metlife Company Profile

MetLife, Inc. engages in the insurance, annuities, employee benefits, and asset management businesses. It operates through five segments: U.S.; Asia; Latin America; Europe, the Middle East and Africa; and MetLife Holdings. The company offers life, dental, group short- and long-term disability, individual disability, accidental death and dismemberment, vision, and accident and health coverages, as well as prepaid legal plans; administrative services-only arrangements to employers; and stable value products, including general and separate account guaranteed interest contracts, and private floating rate funding agreements. It also provides pension risk transfers, institutional income annuities, tort settlements, and capital markets investment products; and other products and services, such as life insurance products and funding agreements for funding postretirement benefits, as well as company, bank, or trust-owned life insurance used to finance nonqualified benefit programs for executives. In addition, the company offers automobile, homeowners', and personal excess liability, as well as small business owners' property, liability, and business interruption insurance products. Further, it provides fixed annuities and pension products; medical and credit insurance products; variable, universal, term, endowment, and whole life insurance products; variable, and fixed and indexed-linked annuities; and protection against costs of long-term health care services. The company serves individuals, corporations and their employees, and other institutions and their members through independent agents, property and casualty specialists, sales forces, sales teams and relationship managers, and sponsoring organizations and affinity groups, as well as through career and independent agencies, bancassurance, direct marketing and e-commerce, brokers, and other third-party distribution channels. MetLife, Inc. was founded in 1863 and is headquartered in New York, New York.

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