Primerica (PRI) versus Voya Financial (VOYA) Critical Analysis

Primerica (NYSE: PRI) and Voya Financial (NYSE:VOYA) are both mid-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, earnings, valuation, profitability, risk and dividends.

Risk and Volatility

Primerica has a beta of 1.14, meaning that its share price is 14% more volatile than the S&P 500. Comparatively, Voya Financial has a beta of 1.53, meaning that its share price is 53% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for Primerica and Voya Financial, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Primerica 0 3 0 0 2.00
Voya Financial 0 1 12 0 2.92

Primerica currently has a consensus target price of $103.00, indicating a potential upside of 5.48%. Voya Financial has a consensus target price of $58.50, indicating a potential upside of 9.51%. Given Voya Financial’s stronger consensus rating and higher probable upside, analysts plainly believe Voya Financial is more favorable than Primerica.

Dividends

Primerica pays an annual dividend of $1.00 per share and has a dividend yield of 1.0%. Voya Financial pays an annual dividend of $0.04 per share and has a dividend yield of 0.1%. Primerica pays out 18.1% of its earnings in the form of a dividend. Voya Financial pays out 1.3% 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 7 consecutive years. Primerica is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Primerica and Voya Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Primerica 20.87% 19.88% 2.18%
Voya Financial -25.86% 4.01% 0.23%

Valuation and Earnings

This table compares Primerica and Voya Financial’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Primerica $1.69 billion 2.53 $350.25 million $5.52 17.69
Voya Financial $8.62 billion 1.05 -$2.99 billion $3.01 17.75

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

Insider and Institutional Ownership

91.1% of Primerica shares are owned by institutional investors. 0.9% of Primerica shares are owned by insiders. Comparatively, 0.4% of Voya Financial shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Primerica beats Voya Financial on 10 of the 17 factors compared between the two stocks.

Primerica Company Profile

Primerica, Inc., together with its subsidiaries, distributes financial products to middle income households in the United States and Canada. The company operates in three segments: Term Life Insurance; Investment and Savings Products; and Corporate and Other Distributed Products. It underwrites individual term life insurance products. The company also distributes and sells mutual funds and various retirement plans, managed investments, variable and fixed annuities, fixed indexed annuities, and segregated funds. In addition, it offers auto and homeowners' insurance, long-term care insurance, home automation solutions, and mortgage loan referrals; and insurance products, including supplemental medical and dental, accidental death, and disability for small businesses. Further, the company provides prepaid legal services that assist subscribers with legal matters, such as drafting wills, living wills and powers of attorney, trial defense, and motor vehicle-related matters. The company distributes and sells its products through licensed sales representatives. Primerica, Inc. was founded in 1927 and is based in Duluth, Georgia.

Voya Financial Company Profile

Voya Financial, Inc. operates as a retirement, investment, and insurance company in the United States. It operates through Retirement, Investment Management, Individual Life, and Employee Benefits segments. The Retirement segment offers tax-deferred employer-sponsored retirement savings plans and administrative services; and individual account rollover plans and other retail financial products, as well as financial planning and advisory services. This segment serves corporate, education, healthcare, and other non-profit and government entities, as well as institutional and individual customers through third-party administrators, wirehouse affiliated brokers, registered investment advisors, independent sales agents, and consulting firms. The Investment Management segment provides fixed income, equity, multi-asset, and alternative products and solutions to individual and institutional customers directly, as well as through consultant channel, banks, broker-dealers, and independent financial advisers. The Individual Life segment provides wealth protection and transfer opportunities through universal, variable, and term life products. The Employee Benefits segment offers stop loss, group life, voluntary employee-paid, and disability products through consultants, brokers, third-party administrators, enrollment firms, and technology partners. The company was formerly known as ING U.S., Inc. and changed its name to Voya Financial, Inc. in April 2014. Voya Financial, Inc. was incorporated in 1999 and is based in New York, New York.

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