Metlife (NYSE:MET) and Torchmark (NYSE:TMK) are both large-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, risk, profitability and dividends.

Earnings and Valuation

This table compares Metlife and Torchmark’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Metlife $62.09 billion 0.77 $4.01 billion $4.50 10.74
Torchmark $4.16 billion 2.39 $1.45 billion $4.82 18.28

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

Analyst Recommendations

This is a summary of current recommendations and price targets for Metlife and Torchmark, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Metlife 0 8 7 0 2.47
Torchmark 4 2 1 0 1.57

Metlife presently has a consensus target price of $55.00, suggesting a potential upside of 13.82%. Torchmark has a consensus target price of $83.57, suggesting a potential downside of 5.13%. Given Metlife’s stronger consensus rating and higher possible upside, analysts clearly believe Metlife is more favorable than Torchmark.

Risk & Volatility

Metlife has a beta of 1.23, meaning that its stock price is 23% more volatile than the S&P 500. Comparatively, Torchmark has a beta of 0.91, meaning that its stock price is 9% less volatile than the S&P 500.

Insider and Institutional Ownership

77.4% of Metlife shares are held by institutional investors. Comparatively, 73.7% of Torchmark shares are held by institutional investors. 0.3% of Metlife shares are held by insiders. Comparatively, 3.7% of Torchmark shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Metlife 6.12% 9.17% 0.73%
Torchmark 36.13% 11.23% 2.77%

Dividends

Metlife pays an annual dividend of $1.68 per share and has a dividend yield of 3.5%. Torchmark pays an annual dividend of $0.64 per share and has a dividend yield of 0.7%. Metlife pays out 37.3% of its earnings in the form of a dividend. Torchmark pays out 13.3% 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. Metlife has raised its dividend for 5 consecutive years and Torchmark has raised its dividend for 8 consecutive years.

Summary

Torchmark beats Metlife on 9 of the 17 factors compared between the two stocks.

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. MetLife, Inc. has a strategic alliance with Ernst & Young LLP. The company serves individuals, corporations and their employees, and other institutions through independent agents, property and casualty specialists, sales forces, sales teams and relationship managers, and other organizations, as well as through career agency, bancassurance, direct marketing, brokerage, and other third-party distribution and e-commerce channels. MetLife, Inc. was founded in 1863 and is headquartered in New York, New York.

Torchmark Company Profile

Torchmark Corporation, through its subsidiaries, provides various life and health insurance products, and annuities in the United States, Canada, and New Zealand. It operates through four segments: Life Insurance, Supplemental Health Insurance, Annuities, and Investments. The Life Insurance segment offers traditional and interest-sensitive whole life and term life insurance, and other life insurance. The Supplemental Health Insurance segment provides health insurance products comprising Medicare Supplements, critical illness, accident, and limited-benefit supplemental hospital and surgical coverages. The Annuities segment provides single-premium and flexible-premium deferred annuities. The company sells its products through sales by direct response, exclusive agents, and independent agents, as well as through direct mail, electronic media, and insert media. Torchmark Corporation was founded in 1900 and is headquartered in McKinney, Texas.

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