Financial Comparison: Reinsurance Group of America (RGA) vs. AVIVA PLC/ADR (AVVIY)

Reinsurance Group of America (NYSE: RGA) and AVIVA PLC/ADR (OTCMKTS:AVVIY) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their dividends, risk, institutional ownership, profitability, valuation, earnings and analyst recommendations.

Profitability

This table compares Reinsurance Group of America and AVIVA PLC/ADR’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Reinsurance Group of America 13.72% 7.99% 1.17%
AVIVA PLC/ADR N/A N/A N/A

Insider and Institutional Ownership

92.5% of Reinsurance Group of America shares are owned by institutional investors. Comparatively, 0.3% of AVIVA PLC/ADR shares are owned by institutional investors. 1.5% of Reinsurance Group of America shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings for Reinsurance Group of America and AVIVA PLC/ADR, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Reinsurance Group of America 1 4 3 0 2.25
AVIVA PLC/ADR 0 1 1 0 2.50

Reinsurance Group of America currently has a consensus target price of $149.13, indicating a potential upside of 5.69%. Given Reinsurance Group of America’s higher possible upside, analysts plainly believe Reinsurance Group of America is more favorable than AVIVA PLC/ADR.

Valuation and Earnings

This table compares Reinsurance Group of America and AVIVA PLC/ADR’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 $12.52 billion 0.72 $1.82 billion $10.84 13.02
AVIVA PLC/ADR $63.97 billion 0.40 $1.93 billion $1.39 9.12

AVIVA PLC/ADR has higher revenue and earnings than Reinsurance Group of America. AVIVA PLC/ADR is trading at a lower price-to-earnings ratio than Reinsurance Group of America, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Reinsurance Group of America has a beta of 0.83, indicating that its share price is 17% less volatile than the S&P 500. Comparatively, AVIVA PLC/ADR has a beta of 1.03, indicating that its share price is 3% more volatile than the S&P 500.

Dividends

Reinsurance Group of America pays an annual dividend of $2.40 per share and has a dividend yield of 1.7%. AVIVA PLC/ADR pays an annual dividend of $0.98 per share and has a dividend yield of 7.7%. Reinsurance Group of America pays out 22.1% of its earnings in the form of a dividend. AVIVA PLC/ADR pays out 70.5% 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. Reinsurance Group of America has increased its dividend for 7 consecutive years.

Summary

Reinsurance Group of America beats AVIVA PLC/ADR on 11 of the 16 factors compared between the two stocks.

Reinsurance Group of America Company Profile

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.

AVIVA PLC/ADR Company Profile

Aviva plc provides various insurance and savings products primarily in the United Kingdom, rest of Europe, Canada, and Asia. The company offers life insurance, long term health and accident insurance, pension, and annuity products; and lifetime mortgage products. It also provides insurance cover to individuals, and small and medium-sized businesses for risks associated primarily with motor vehicles, property, and medical expenses, as well as liabilities, such as employers' and professional indemnity liabilities. In addition, the company offers home, commercial, pet, travel, critical illness, income protection, and private medical life insurance products. Further, it provides investment management services for institutional pension fund mandates; and manages various retail investment products, including investment funds, unit trusts, open-ended investment companies, and ISAs for third-party financial institutions, pension funds, public sector organizations, investment professionals, and private investors. The company markets its products through a network of insurance brokers, as well as MyAviva, an online platform. The company was formerly known as CGNU plc and changed its name to Aviva plc in July 2002. Aviva plc was founded in 1696 and is headquartered in London, the United Kingdom.

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