Comparing Lincoln National (NYSE:LNC) & CNA Financial (NYSE:CNA)

CNA Financial (NYSE:CNA) and Lincoln National (NYSE:LNC) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, dividends, profitability, risk, institutional ownership and earnings.

Analyst Ratings

This is a summary of current recommendations and price targets for CNA Financial and Lincoln National, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CNA Financial	0	1	1	0	2.50
Lincoln National	1	6	7	0	2.43

Lincoln National has a consensus target price of $47.85, suggesting a potential upside of 13.52%. Given Lincoln National’s higher probable upside, analysts plainly believe Lincoln National is more favorable than CNA Financial.

Earnings and Valuation

This table compares CNA Financial and Lincoln National”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CNA Financial	$14.99 billion	0.87	$1.28 billion	$4.55	10.54
Lincoln National	$18.21 billion	0.44	$1.18 billion	$11.54	3.65

CNA Financial has higher earnings, but lower revenue than Lincoln National. Lincoln National is trading at a lower price-to-earnings ratio than CNA Financial, indicating that it is currently the more affordable of the two stocks.

Dividends

CNA Financial pays an annual dividend of $1.92 per share and has a dividend yield of 4.0%. Lincoln National pays an annual dividend of $1.80 per share and has a dividend yield of 4.3%. CNA Financial pays out 42.2% of its earnings in the form of a dividend. Lincoln National pays out 15.6% 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 raised its dividend for 9 consecutive years. Lincoln National is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk and Volatility

CNA Financial has a beta of 0.27, meaning that its share price is 73% less volatile than the S&P 500. Comparatively, Lincoln National has a beta of 1.12, meaning that its share price is 12% more volatile than the S&P 500.

Insider & Institutional Ownership

98.5% of CNA Financial shares are owned by institutional investors. Comparatively, 72.8% of Lincoln National shares are owned by institutional investors. 0.3% of CNA Financial shares are owned by insiders. Comparatively, 1.0% of Lincoln National shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares CNA Financial and Lincoln National’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CNA Financial	8.16%	11.34%	1.84%
Lincoln National	12.21%	17.35%	0.41%

Summary

Lincoln National beats CNA Financial on 10 of the 17 factors compared between the two stocks.

About CNA Financial

CNA Financial Corporation provides commercial property and casualty insurance products in the United States and internationally. It operates through Specialty, Commercial, International, Life & Group, and Corporate & Other segments. The company 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 and cyber 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 casualty coverages for healthcare industry; surety and fidelity bonds; and warranty and alternative risks products. It also provides property, marine, boiler, and machinery coverage insurance products; casualty insurance products comprising workers' compensation, general and product liability, commercial auto, umbrella, and excess and surplus coverages; specialized loss-sensitive insurance programs and total risk management services; and run-off long term care policies. The company was founded in 1853 and is based in Chicago, Illinois. CNA Financial Corporation operates as a subsidiary of Loews Corporation.

About Lincoln National

Lincoln National Corporation, through its subsidiaries, operates multiple insurance and retirement businesses in the United States. It operates in four segments: Life Insurance, Annuities, Group Protection, and Retirement Plan Services. The Life Insurance segment provides life insurance products, including term insurance, universal life insurance (UL), indexed universal life insurance, variable universal life insurance (VUL), linked-benefit UL and VUL products, and critical illness and long-term care riders. The Annuities segment offers variable, fixed, and registered index-linked annuities. The Group Protection segment offers group non-medical insurance products consisting of short and long-term disability and statutory disability; paid family medical leave administration and absence management services; term life; dental and vision; and accident, critical illness, and hospital indemnity benefits and services to the employer marketplace through various forms of employee-paid and employer-paid plans. The Retirement Plan Services segment provides employers with retirement plan products and services primarily in the defined contribution retirement plan marketplace; individual and group variable annuities, group fixed annuities, and mutual fund-based programs; and various plan services, including plan recordkeeping, compliance testing, participant education, and trust and custodial services. The company distributes its products through consultants, brokers, planners, agents, financial advisors, third-party administrators, and other intermediaries. Lincoln National Corporation was founded in 1905 and is headquartered in Radnor, Pennsylvania.