Critical Survey: Cna Financial (NYSE:CNA) & Hartford Financial Services Group (NYSE:HIG)

Cna Financial (NYSE:CNA) and Hartford Financial Services Group (NYSE:HIG) are both large-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, valuation, analyst recommendations, institutional ownership, earnings, profitability and dividends.

Dividends

Cna Financial pays an annual dividend of $1.40 per share and has a dividend yield of 3.0%. Hartford Financial Services Group pays an annual dividend of $1.20 per share and has a dividend yield of 2.0%. Cna Financial pays out 45.2% of its earnings in the form of a dividend. Hartford Financial Services Group pays out 27.7% 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. Cna Financial has increased its dividend for 2 consecutive years and Hartford Financial Services Group has increased its dividend for 6 consecutive years.

Earnings & Valuation

This table compares Cna Financial and Hartford Financial Services Group’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cna Financial $10.13 billion 1.23 $813.00 million $3.10 14.83
Hartford Financial Services Group $18.96 billion 1.16 $1.81 billion $4.33 14.14

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

Profitability

This table compares Cna Financial and Hartford Financial Services Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cna Financial 6.19% 7.72% 1.53%
Hartford Financial Services Group 8.66% 12.69% 2.75%

Risk and Volatility

Cna Financial has a beta of 0.79, meaning that its stock price is 21% less volatile than the S&P 500. Comparatively, Hartford Financial Services Group has a beta of 0.63, meaning that its stock price is 37% less volatile than the S&P 500.

Institutional and Insider Ownership

99.1% of Cna Financial shares are owned by institutional investors. Comparatively, 90.3% of Hartford Financial Services Group shares are owned by institutional investors. 0.2% of Cna Financial shares are owned by insiders. Comparatively, 1.7% of Hartford Financial Services Group shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations for Cna Financial and Hartford Financial Services Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cna Financial 0 0 0 0 N/A
Hartford Financial Services Group 0 3 7 0 2.70

Hartford Financial Services Group has a consensus price target of $65.33, indicating a potential upside of 6.72%. Given Hartford Financial Services Group’s higher probable upside, analysts clearly believe Hartford Financial Services Group is more favorable than Cna Financial.

Summary

Hartford Financial Services Group beats Cna Financial on 11 of the 16 factors compared between the two stocks.

About Cna Financial

CNA Financial Corporation provides commercial property and casualty insurance products primarily in the United States. It offers professional liability coverages and risk management services to various professional firms, including architects, real estate agents, and accounting and law firms; directors and officers, employment practices, fiduciary, and fidelity coverages to small and mid-size firms, public and privately held firms, and not-for-profit organizations; professional and general liability, as well as associated standard property and casualty coverages for healthcare industry; surety and fidelity bonds; and warranty and alternative risks products. The company also provides property insurance products, such as property, marine, boiler, and machinery coverages; casualty insurance products comprising workers' compensation, general and product liability, commercial auto, and umbrella coverages; specialized loss-sensitive insurance programs and total risk management services; and run-off long term policies. In addition, it offers long-tail exposures comprising commercial automobile liability, workers compensation, general and medical professional liability, other professional and management liability, and assumed reinsurance run-off and products liability; and short-tail exposures comprising property, commercial automobile physical damage, marine, surety, and warranty. The company markets its products through independent agents, brokers, and general underwriters to customers small, medium, and large businesses; insurance companies; associations; professionals; and other groups in the marine, oil and gas, construction, manufacturing, life science, property, financial services, healthcare, and technology industries. The company was founded in 1853 and is headquartered in Chicago, Illinois. CNA Financial Corporation operates as a subsidiary of Loews Corporation.

About Hartford Financial Services Group

The Hartford Financial Services Group, Inc., through its subsidiaries, provides insurance and financial services to individual and business customers in the United States. Its Commercial Lines segment offers workers' compensation, property, automobile, marine, livestock, liability, and umbrella coverages; and customized insurance products and risk management services, including professional liability, bond, surety, and specialty casualty coverages. This segment provides its products and services through regional offices, branches, sales and policyholder service centers, independent agents, brokers, and wholesalers. The company's Personal Lines segment offers automobile, homeowners, and personal umbrella coverages through direct-to-consumer channel and independent agents. Its Property & Casualty Other Operations segment provides coverage for asbestos and environmental exposures. The company's Group Benefits segment offers group life, and accident and disability coverages, as well as other group coverages to members of employer and affinity groups, and associations through direct insurance policies; reinsurance to other insurance companies; employer paid and voluntary product coverages; disability underwriting, administration, and claims processing to self-funded employer plans; and a single-company leave management solution. This segment distributes its group insurance products and services through brokers, consultants, third-party administrators, trade associations, and private exchanges. Its Hartford Funds segment provides investment products for retail and retirement accounts; exchange-traded products through broker-dealer organizations, independent financial advisers, defined contribution plans, financial consultants, bank trust groups, and registered investment advisers; and investment-management and administrative services, such as product design, implementation, and oversight. The company was founded in 1810 and is headquartered in Hartford, Connecticut.

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