Contrasting GWG Holdings (GWGH) and CNO Financial Group (CNO)

GWG Holdings (NASDAQ: GWGH) and CNO Financial Group (NYSE:CNO) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their profitability, analyst recommendations, dividends, earnings, risk, valuation and institutional ownership.

Profitability

This table compares GWG Holdings and CNO Financial Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
GWG Holdings -21.92% -184.34% 4.35%
CNO Financial Group 9.61% 5.74% 0.81%

Institutional & Insider Ownership

42.5% of GWG Holdings shares are owned by institutional investors. Comparatively, 95.4% of CNO Financial Group shares are owned by institutional investors. 77.4% of GWG Holdings shares are owned by insiders. Comparatively, 2.0% of CNO Financial Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Valuation & Earnings

This table compares GWG Holdings and CNO Financial Group’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
GWG Holdings $62.55 million 0.90 -$15.50 million ($2.68) -3.62
CNO Financial Group $4.15 billion 0.94 $935.40 million $2.29 10.05

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

Risk and Volatility

GWG Holdings has a beta of 0.51, indicating that its stock price is 49% less volatile than the S&P 500. Comparatively, CNO Financial Group has a beta of 1.21, indicating that its stock price is 21% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and recommmendations for GWG Holdings and CNO Financial Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
GWG Holdings 0 0 2 0 3.00
CNO Financial Group 1 6 1 0 2.00

GWG Holdings currently has a consensus target price of $14.50, suggesting a potential upside of 49.48%. CNO Financial Group has a consensus target price of $20.50, suggesting a potential downside of 10.91%. Given GWG Holdings’ stronger consensus rating and higher probable upside, equities analysts plainly believe GWG Holdings is more favorable than CNO Financial Group.

Dividends

CNO Financial Group pays an annual dividend of $0.36 per share and has a dividend yield of 1.6%. GWG Holdings does not pay a dividend. CNO Financial Group pays out 15.7% of its earnings in the form of a dividend. GWG Holdings has raised its dividend for 4 consecutive years.

Summary

CNO Financial Group beats GWG Holdings on 9 of the 16 factors compared between the two stocks.

GWG Holdings Company Profile

GWG Holdings, Inc. is the parent company of GWG Life, is a financial services company. The Company is a financial purchaser of life insurance assets in the secondary market. It creates opportunities for consumers owning life insurance to obtain value for their policies as compared to the traditional options offered by insurance companies. It also creates opportunities for investors to participate in alternative asset classes, such as life insurance, not correlated to traditional financial markets. Through its subsidiary GWG Life, LLC, it has developed an option for the life insurance secondary market called LifeCare Xchange (LCX). It provides seniors with the exchange value of their life insurance policies they can apply to long-term care and other post-retirement needs. It generally purchases life insurance assets directly from policy owners having purchased their life insurance in the primary market.

CNO Financial Group Company Profile

CNO Financial Group, Inc. is a holding company for a group of insurance companies operating throughout the United States that develops, markets and administers health insurance, annuity, individual life insurance and other insurance products. The Company’s segments include Bankers Life, Washington National and Colonial Penn. It sells health insurance, annuity, individual life insurance and other insurance products through three primary distribution channels: career agents, independent producers and direct marketing. The Company offers products in various categories, including health, annuities and life insurance. The health products include Medicare supplement, long-term care, prescription drug plan and Medicare advantage, supplemental health products and other health products. The annuities products include fixed index annuities and other fixed interest annuities. The life insurance products include interest-sensitive life products and traditional life products.

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