Prudential Financial (NYSE: PRU) and China Life Insurance (NYSE:LFC) are both large-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their risk, analyst recommendations, institutional ownership, earnings, valuation, dividends and profitability.

Profitability

This table compares Prudential Financial and China Life Insurance’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Prudential Financial 13.57% 9.25% 0.58%
China Life Insurance 6.26% 12.32% 1.38%

Insider & Institutional Ownership

64.5% of Prudential Financial shares are owned by institutional investors. Comparatively, 0.3% of China Life Insurance shares are owned by institutional investors. 0.6% of Prudential Financial shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Prudential Financial and China Life Insurance’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Prudential Financial $53.65 billion 0.77 $7.86 billion $10.58 9.29
China Life Insurance $105.48 billion 0.76 $4.77 billion $0.93 15.32

Prudential Financial has higher earnings, but lower revenue than China Life Insurance. Prudential Financial is trading at a lower price-to-earnings ratio than China Life Insurance, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Prudential Financial has a beta of 1.46, suggesting that its share price is 46% more volatile than the S&P 500. Comparatively, China Life Insurance has a beta of 1.59, suggesting that its share price is 59% more volatile than the S&P 500.

Dividends

Prudential Financial pays an annual dividend of $3.60 per share and has a dividend yield of 3.7%. China Life Insurance pays an annual dividend of $0.14 per share and has a dividend yield of 1.0%. Prudential Financial pays out 34.0% of its earnings in the form of a dividend. China Life Insurance pays out 15.1% 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. Prudential Financial has raised its dividend for 9 consecutive years. Prudential Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Prudential Financial and China Life Insurance, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Prudential Financial 0 4 10 0 2.71
China Life Insurance 2 1 7 0 2.50

Prudential Financial presently has a consensus target price of $115.09, indicating a potential upside of 17.03%. China Life Insurance has a consensus target price of $13.85, indicating a potential downside of 2.81%. Given Prudential Financial’s stronger consensus rating and higher probable upside, equities analysts plainly believe Prudential Financial is more favorable than China Life Insurance.

Summary

Prudential Financial beats China Life Insurance on 11 of the 17 factors compared between the two stocks.

About Prudential Financial

Prudential Financial, Inc., through its subsidiaries, provides insurance, investment management, and other financial products and services in the United States and internationally. It operates through U.S. Individual Solutions, U.S. Workplace Solutions, Investment Management, and International Insurance divisions. The U.S. Individual Solutions division offers individual variable and fixed annuity products to the mass affluent and affluent markets. It also provides universal, term, variable, and other life insurance products to the mass middle, mass affluent, and affluent markets. The U.S. Workplace Solutions division provides recordkeeping, plan administration, actuarial advisory, tailored participant education and communication, trustee, institutional and retail investment, and brokerage services, as well as institutional investment products to the payout annuity and stable value markets. It also provides group life; long-term and short-term group disability; and group corporate-, bank-, and trust-owned life insurance to institutional clients for employee plans and affinity groups, as well as accidental death, dismemberment, other ancillary coverage, and plan administrative services. The Investment Management division offers asset management services, such as institutional portfolio and retail funds management, private lending and asset securitization, and other structured products for public and private fixed income, public equity, and real estate, as well as commercial mortgage origination and servicing, mutual funds, and other retail services. The International Insurance division provides individual and group life insurance, retirement, and related products, as well as reinsurance products. The company offers its products and services to individual and institutional customers through its proprietary and third-party distribution networks. Prudential Financial, Inc. was founded in 1875 and is headquartered in Newark, New Jersey.

About China Life Insurance

China Life Insurance Company Limited, together with its subsidiaries, operates as a life insurance company in the People's Republic of China. The company operates in four segments: Life Insurance Business, Health Insurance Business, Accident Insurance Business, and Other Business. It offers individual and group life, annuity, accident, and health insurance products, as well as provides pension products. The company is also involved in reinsurance business; the asset management, fund management, and health management activities; retirement properties investment; and provision of financial services. It sells its products through agents, direct sales representatives, and dedicated and non-dedicated agencies. The company was founded in 1949 and is headquartered in Beijing, the People's Republic of China. China Life Insurance Company Limited is a subsidiary of China Life Insurance (Group) Company Limited.

Receive News & Ratings for Prudential Financial Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Prudential Financial and related companies with MarketBeat.com's FREE daily email newsletter.