Analyzing Reinsurance Group of America (RGA) & Genworth Financial (GNW)

Reinsurance Group of America (NYSE:RGA) and Genworth Financial (NYSE:GNW) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, profitability, earnings, dividends, risk and institutional ownership.

Volatility & Risk

Reinsurance Group of America has a beta of 0.67, indicating that its share price is 33% less volatile than the S&P 500. Comparatively, Genworth Financial has a beta of 1.51, indicating that its share price is 51% more volatile than the S&P 500.

Institutional & Insider Ownership

91.8% of Reinsurance Group of America shares are held by institutional investors. Comparatively, 63.5% of Genworth Financial shares are held by institutional investors. 0.7% of Reinsurance Group of America shares are held by company insiders. Comparatively, 0.3% of Genworth Financial shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Reinsurance Group of America and Genworth Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Reinsurance Group of America 5.56% 9.11% 1.27%
Genworth Financial 1.41% 1.23% 0.17%

Dividends

Reinsurance Group of America pays an annual dividend of $2.40 per share and has a dividend yield of 1.7%. Genworth Financial does not pay a dividend. Reinsurance Group of America pays out 19.8% of its earnings in the form of a dividend. Reinsurance Group of America has raised its dividend for 8 consecutive years.

Analyst Ratings

This is a summary of current recommendations and price targets for Reinsurance Group of America and Genworth Financial, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Reinsurance Group of America 1 2 2 0 2.20
Genworth Financial 0 3 0 0 2.00

Reinsurance Group of America presently has a consensus target price of $141.60, suggesting a potential downside of 1.85%. Genworth Financial has a consensus target price of $5.00, suggesting a potential upside of 31.23%. Given Genworth Financial’s higher possible upside, analysts clearly believe Genworth Financial is more favorable than Reinsurance Group of America.

Earnings & Valuation

This table compares Reinsurance Group of America and Genworth Financial’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Reinsurance Group of America $12.88 billion 0.70 $715.84 million $12.12 11.90
Genworth Financial $8.43 billion 0.23 $119.00 million $0.36 10.58

Reinsurance Group of America has higher revenue and earnings than Genworth Financial. Genworth Financial is trading at a lower price-to-earnings ratio than Reinsurance Group of America, indicating that it is currently the more affordable of the two stocks.

Summary

Reinsurance Group of America beats Genworth Financial on 14 of the 17 factors compared between the two stocks.

Reinsurance Group of America Company Profile

Reinsurance Group of America, Incorporated engages in reinsurance business. It offers individual and group life and health insurance products, including term life, credit life, universal life, whole life, group life and health, joint and last survivor insurance, critical illness, disability, and longevity products, as well as asset-intensive and financial reinsurance products. The company also provides reinsurance for mortality, morbidity, and lapse risk associated with products; and reinsurance for investment-related risks, as well as develops and markets technology solutions for the insurance industry. It serves life insurance companies in the United States, Latin America, Canada, Europe, the Middle East, Africa, and the Asia Pacific. Reinsurance Group of America, Incorporated was founded in 1973 and is headquartered in Chesterfield, Missouri.

Genworth Financial Company Profile

Genworth Financial, Inc. provides insurance and homeownership solutions in the United States and internationally. It operates through five segments: U.S. Mortgage Insurance, Canada Mortgage Insurance, Australia Mortgage Insurance, U.S. Life Insurance, and Runoff. The U.S. Mortgage Insurance segment offers mortgage insurance products primarily insuring prime-based, individually underwritten residential mortgage loans. The Canada Mortgage Insurance segment provides flow mortgage insurance; and bulk mortgage insurance products and services that aid in the sale of mortgages to the capital markets, as well as helps lenders manage capital and risk in Canada. The Australia Mortgage Insurance segment offers flow mortgage insurance and bulk mortgage insurance that aids in the sale of mortgages to the capital markets and helps lenders manage capital and risk. The U.S. Life Insurance segment offers long-term care insurance products and fixed annuity products in the United States. The Runoff segment covers non-strategic products, which primarily include variable annuity, variable life insurance, institutional, corporate-owned life insurance, and accident and health insurance products. This segment's institutional products include funding agreements, funding agreements backing notes, and guaranteed investment contracts. It distributes its products and services primarily through appointed independent producers and employer groups. Genworth Financial, Inc. was founded in 2003 and is headquartered in Richmond, Virginia.

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