Head-To-Head Comparison: MetLife (NYSE:MET) & MBIA (NYSE:MBI)

MetLife (NYSE:MET) and MBIA (NYSE:MBI) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, earnings, valuation, institutional ownership, risk and dividends.

Institutional & Insider Ownership

95.0% of MetLife shares are held by institutional investors. Comparatively, 61.0% of MBIA shares are held by institutional investors. 0.4% of MetLife shares are held by insiders. Comparatively, 10.4% of MBIA shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of current recommendations and price targets for MetLife and MBIA, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MetLife	0	3	9	2	2.93
MBIA	1	0	1	0	2.00

MetLife presently has a consensus target price of $95.42, suggesting a potential upside of 26.31%. MBIA has a consensus target price of $8.50, suggesting a potential upside of 28.17%. Given MBIA’s higher probable upside, analysts clearly believe MBIA is more favorable than MetLife.

Volatility and Risk

MetLife has a beta of 0.76, suggesting that its share price is 24% less volatile than the S&P 500. Comparatively, MBIA has a beta of 1.91, suggesting that its share price is 91% more volatile than the S&P 500.

Valuation & Earnings

This table compares MetLife and MBIA”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MetLife	$70.99 billion	0.70	$4.43 billion	$5.31	14.23
MBIA	$42.00 million	7.97	-$444.00 million	($3.64)	-1.82

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

Profitability

This table compares MetLife and MBIA’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MetLife	5.30%	21.00%	0.85%
MBIA	-198.88%	N/A	-2.12%

Summary

MetLife beats MBIA on 11 of the 15 factors compared between the two stocks.

About MetLife

MetLife, Inc., a financial services company, provides insurance, annuities, employee benefits, and asset management services worldwide. It operates through six segments: Retirement and Income Solutions; Group Benefits; 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, pet insurance, accidental death and dismemberment, vision, and accident and health coverages, as well as prepaid legal plans; administrative services-only arrangements to employers; and general and separate account, and synthetic guaranteed interest contracts, as well as private floating rate funding agreements. It also provides pension risk transfers, institutional income annuities, structured 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, it provides fixed, indexed-linked, and variable annuities; pension products; regular savings products; whole and term life, endowments, universal and variable life, and group life products; longevity reinsurance solutions; credit insurance products; and protection against long-term health care services. MetLife, Inc. was incorporated in 1999 and is based in New York, New York.

About MBIA

MBIA Inc. provides financial guarantee insurance services to public finance markets in the United States. It operates United States (U.S.) Public Finance Insurance, and International and Structured Finance Insurance segments. The company issues financial guarantees for municipal bonds, including tax-exempt and taxable indebtedness of the U.S. political subdivisions, as well as utility districts, airports, health care institutions, higher educational facilities, housing authorities, and other similar agencies and obligations issued by private entities. It also insures the non-U.S. public finance and global structured finance, including asset-backed obligations; and sovereign-related and sub-sovereign bonds, and privately issued bonds used for the financing for utilities, toll roads, bridges, public transportation facilities, and other types of infrastructure projects, as well as offers third-party reinsurance services. MBIA Inc. was founded in 1973 and is headquartered in Purchase, New York.