China Life Insurance (NYSE: LFC) and Lincoln Financial Group (NYSE:LNC) are both large-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, earnings, profitability, analyst recommendations, risk, institutional ownership and dividends.
This is a breakdown of current ratings for China Life Insurance and Lincoln Financial Group, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|China Life Insurance||2||1||7||0||2.50|
|Lincoln Financial Group||1||6||6||0||2.38|
China Life Insurance currently has a consensus price target of $13.85, suggesting a potential downside of 0.86%. Lincoln Financial Group has a consensus price target of $82.25, suggesting a potential upside of 19.41%. Given Lincoln Financial Group’s higher probable upside, analysts plainly believe Lincoln Financial Group is more favorable than China Life Insurance.
Volatility & Risk
China Life Insurance has a beta of 1.57, meaning that its stock price is 57% more volatile than the S&P 500. Comparatively, Lincoln Financial Group has a beta of 1.94, meaning that its stock price is 94% more volatile than the S&P 500.
This table compares China Life Insurance and Lincoln Financial Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|China Life Insurance||6.26%||12.32%||1.38%|
|Lincoln Financial Group||13.90%||10.69%||0.63%|
Insider & Institutional Ownership
0.3% of China Life Insurance shares are owned by institutional investors. Comparatively, 80.5% of Lincoln Financial Group shares are owned by institutional investors. 1.1% of Lincoln Financial Group shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
China Life Insurance pays an annual dividend of $0.14 per share and has a dividend yield of 1.0%. Lincoln Financial Group pays an annual dividend of $1.32 per share and has a dividend yield of 1.9%. China Life Insurance pays out 15.1% of its earnings in the form of a dividend. Lincoln Financial Group pays out 16.9% 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. Lincoln Financial Group has raised its dividend for 7 consecutive years. Lincoln Financial Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation and Earnings
This table compares China Life Insurance and Lincoln Financial Group’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|China Life Insurance||$105.48 billion||0.75||$4.77 billion||$0.93||15.02|
|Lincoln Financial Group||$14.59 billion||1.03||$2.08 billion||$7.79||8.84|
China Life Insurance has higher revenue and earnings than Lincoln Financial Group. Lincoln Financial Group 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.
Lincoln Financial Group beats China Life Insurance on 9 of the 17 factors compared between the two stocks.
China Life Insurance Company Profile
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 based in Beijing, the People's Republic of China. China Life Insurance Company Limited is a subsidiary of China Life Insurance (Group) Company Limited.
Lincoln Financial Group Company Profile
Lincoln National Corporation, through its subsidiaries, operates multiple insurance and retirement businesses in the United States. It operates through four segments: Annuities, Retirement Plan Services, Life Insurance, and Group Protection. The company sells a range of wealth protection, accumulation, and retirement income products and solutions. The company's products include fixed and indexed annuities, variable annuities, universal life insurance (UL), variable universal life insurance (VUL), linked-benefit UL, term life insurance, indexed universal life insurance, and employer-sponsored retirement plans and services, as well as group life, disability, and dental products. It also provides various plan investment vehicles, including individual and group variable annuities, group fixed annuities, and mutual fund-based programs; single and survivorship versions of UL and VUL, including corporate-owned UL and VUL, and bank-owned UL and VUL insurance products; and group non-medical insurance products, such as term life, universal life, disability, dental, vision, accident, and critical illness insurance to the employer market place through various forms of contributory and non-contributory plans. The company distributes its products through consultants, brokers, planners, agents, financial advisors, third-party administrators, and other intermediaries. Lincoln National Corporation was founded in 1904 and is headquartered in Radnor, Pennsylvania.
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