Head to Head Review: Reinsurance Group of America (RGA) versus Independence (NYSE:IHC)

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

Analyst Recommendations

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Reinsurance Group of America 1 3 2 0 2.17
Independence 0 0 0 0 N/A

Reinsurance Group of America currently has a consensus price target of $146.00, indicating a potential upside of 2.59%. Given Reinsurance Group of America’s higher probable upside, research analysts plainly believe Reinsurance Group of America is more favorable than Independence.

Dividends

Reinsurance Group of America pays an annual dividend of $2.40 per share and has a dividend yield of 1.7%. Independence pays an annual dividend of $0.30 per share and has a dividend yield of 0.8%. 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 and Independence has raised its dividend for 7 consecutive years. Reinsurance Group of America is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

Reinsurance Group of America has a beta of 0.68, indicating that its share price is 32% less volatile than the S&P 500. Comparatively, Independence has a beta of 0.25, indicating that its share price is 75% less volatile than the S&P 500.

Profitability

This table compares Reinsurance Group of America and Independence’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%
Independence 11.91% 11.56% 4.88%

Insider & Institutional Ownership

92.5% of Reinsurance Group of America shares are owned by institutional investors. Comparatively, 18.1% of Independence shares are owned by institutional investors. 0.7% of Reinsurance Group of America shares are owned by company insiders. Comparatively, 7.0% of Independence shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Reinsurance Group of America and Independence’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Reinsurance Group of America $12.88 billion 0.69 $715.84 million $12.12 11.74
Independence $320.49 million 1.69 $42.04 million N/A N/A

Reinsurance Group of America has higher revenue and earnings than Independence.

Summary

Reinsurance Group of America beats Independence on 9 of the 15 factors compared between the two stocks.

About Reinsurance Group of America

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.

About Independence

Independence Holding Company, through its subsidiaries, engages in life and health insurance business. The company's dental portfolio includes indemnity and PPO plans for employer groups of two or more lives, and for individuals within affinity groups; vision plans that offer a flat reimbursement amount for exams and materials; and short-term medical products for people with temporary needs for health coverage. It also provides supplemental products, including hospital indemnity, fixed indemnity limited benefit, critical illness, accident medical coverage, and life insurance products to individuals and families; and pet insurance and occupational accident insurance products. In addition, the company offers group long-term and short-term disability products to employers that provide benefit to their employees; New York short-term disability plan that offers temporary cash payments to replace wages lost; and group term life products, such as group term life, accidental death and dismemberment (AD&D), supplemental life and AD&D, and dependent life products. Independence Holding Company markets its products through independent and affiliated brokers, producers, and agents in 50 states of the United States, the District of Columbia, the Virgin Islands, and Puerto Rico. The company was founded in 1980 and is headquartered in Stamford, Connecticut. Independence Holding Company is a subsidiary of Geneve Holdings, Inc.

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