Critical Review: Prudential Financial (NYSE:PRU) versus Allianz (OTCMKTS:ALIZY)

Allianz (OTCMKTS:ALIZY) and Prudential Financial (NYSE:PRU) are both large-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, valuation, earnings, profitability and risk.

Volatility & Risk

Allianz has a beta of 0.64, suggesting that its stock price is 36% less volatile than the S&P 500. Comparatively, Prudential Financial has a beta of 0.97, suggesting that its stock price is 3% less volatile than the S&P 500.

Dividends

Allianz pays an annual dividend of $1.18 per share and has a dividend yield of 2.6%. Prudential Financial pays an annual dividend of $5.40 per share and has a dividend yield of 4.6%. Allianz pays out 39.2% of its earnings in the form of a dividend. Prudential Financial pays out 74.2% 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 2 consecutive years. Prudential Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares Allianz and Prudential Financial”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Allianz	$194.56 billion	0.90	$10.75 billion	$3.01	15.27
Prudential Financial	$68.05 billion	0.60	$2.73 billion	$7.28	16.11

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

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Allianz and Prudential Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Allianz	1	3	1	1	2.33
Prudential Financial	1	11	0	0	1.92

Prudential Financial has a consensus price target of $118.00, indicating a potential upside of 0.60%. Given Prudential Financial’s higher possible upside, analysts plainly believe Prudential Financial is more favorable than Allianz.

Institutional & Insider Ownership

0.0% of Allianz shares are held by institutional investors. Comparatively, 56.8% of Prudential Financial shares are held by institutional investors. 0.3% of Prudential Financial shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Allianz	5.69%	17.38%	1.06%
Prudential Financial	4.65%	16.60%	0.67%

Summary

Allianz beats Prudential Financial on 10 of the 18 factors compared between the two stocks.

About Allianz

Allianz SE, together with its subsidiaries, provides property-casualty insurance, life/health insurance, and asset management products and services worldwide. The company’s Property-Casualty segment offers various insurance products, including motor liability and own damage, accident, general liability, fire and property, legal expense, credit, and travel to private and corporate customers. Its Life/Health segment provides a range of life and health insurance products on an individual and a group basis, such as annuities, endowment and term insurance, and unit-linked and investment-oriented products, as well as private and supplemental health, and long-term care insurance products. The company’s Asset Management segment offers institutional and retail asset management products and services to third-party investors comprising equity and fixed income funds, and multi-assets; and alternative investment products that include real estate, infrastructure debt/equity, real assets, liquid alternatives, and solutions. Its Corporate and Other segment provides banking services for retail clients, as well as digital investment services. Allianz SE was founded in 1890 and is headquartered in Munich, Germany.

About Prudential Financial

Prudential Financial, Inc., together with its subsidiaries, provides insurance, investment management, and other financial products and services in the United States and internationally. It operates through PGIM, Retirement Strategies, Group Insurance, Individual Life, and International Businesses segments. The PGIM segment offers investment management services and solutions related to public fixed income, public equity, real estate debt and equity, private credit and other alternatives, and multi-asset class strategies to institutional and retail clients, as well as its general account. The Retirement Strategies segment provides a range of retirement investment, and income products and services to retirement plan sponsors in the public, private, and not-for-profit sectors; develops and distributes individual variable and fixed annuity products. The Group Insurance segment offers various group life, and long-term and short-term group disability, as well as group corporate-, bank-, and trust-owned life insurance in the United States primarily for institutional clients for use in connection with employee and membership benefits plans; sells accidental death and dismemberment, and other supplemental health solutions; and plan administration services in connection with its insurance coverages. The Individual Life segment develops and distributes variable life, universal life, and term life insurance products. The International Businesses segment develops and distributes life insurance, retirement products, investment products, and certain accident and health products; and advisory services. The company provides 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.