Critical Survey: Waterdrop (NYSE:WDH) vs. Aegon (NYSE:AEG)

Waterdrop (NYSE:WDH) and Aegon (NYSE:AEG) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their dividends, valuation, analyst recommendations, profitability, risk, earnings and institutional ownership.

Analyst Recommendations

This is a breakdown of recent recommendations for Waterdrop and Aegon, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Waterdrop	0	2	0	0	2.00
Aegon	0	4	3	0	2.43

Waterdrop currently has a consensus price target of $2.00, indicating a potential upside of 38.41%. Aegon has a consensus price target of $10.00, indicating a potential upside of 20.12%. Given Waterdrop’s higher possible upside, equities analysts plainly believe Waterdrop is more favorable than Aegon.

Risk and Volatility

Waterdrop has a beta of -0.18, indicating that its stock price is 118% less volatile than the S&P 500. Comparatively, Aegon has a beta of 0.84, indicating that its stock price is 16% less volatile than the S&P 500.

Profitability

This table compares Waterdrop and Aegon’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Waterdrop	14.28%	11.34%	8.53%
Aegon	N/A	N/A	N/A

Earnings and Valuation

This table compares Waterdrop and Aegon”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Waterdrop	$568.81 million	0.92	$81.36 million	$0.21	6.88
Aegon	$10.29 billion	1.62	$1.11 billion	($0.16)	-52.03

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

Insider and Institutional Ownership

2.0% of Waterdrop shares are held by institutional investors. Comparatively, 4.3% of Aegon shares are held by institutional investors. 24.6% of Waterdrop shares are held 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.

Dividends

Waterdrop pays an annual dividend of $0.05 per share and has a dividend yield of 3.5%. Aegon pays an annual dividend of $0.38 per share and has a dividend yield of 4.6%. Waterdrop pays out 23.8% of its earnings in the form of a dividend. Aegon pays out -237.5% 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. Aegon is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Aegon beats Waterdrop on 9 of the 16 factors compared between the two stocks.

About Waterdrop

Waterdrop Inc., through its subsidiaries, provides online insurance brokerage services to match and connect users with related insurance products underwritten by insurance companies in the People's Republic of China. The company offers short-term health and long-term health and life insurance products and services. It also operates a medical crowdfunding platform. Waterdrop Inc. was founded in 2016 and is headquartered in Beijing, the People's Republic of China.

About Aegon

Aegon Ltd. provides insurance, pensions, retirement, and asset management services in the United States, the Netherlands, the United Kingdom, and internationally. The company offers life, accident, property and casualty, and health insurance; annuities, retirement plans, mutual funds, and stable value solutions; residential mortgage and digital baking services; and retail and institutional investment management solutions and retirement savings vehicles and strategies. It offers its products under the Aegon and Transamerica brands. Aegon Ltd. was founded in 1844 and is headquartered in The Hague, the Netherlands.