Head-To-Head Comparison: Equitable (NYSE:EQH) versus Sompo (OTCMKTS:SMPNY)

Sompo (OTCMKTS:SMPNY) and Equitable (NYSE:EQH) are both large-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, dividends, valuation, institutional ownership, profitability, risk and analyst recommendations.

Insider and Institutional Ownership

92.7% of Equitable shares are owned by institutional investors. 1.1% of Equitable shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Sompo and Equitable”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sompo	$35.69 billion	0.98	$4.25 billion	$2.34	8.04
Equitable	$11.67 billion	1.02	-$1.38 billion	($2.84)	-15.41

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

Dividends

Sompo pays an annual dividend of $0.14 per share and has a dividend yield of 0.7%. Equitable pays an annual dividend of $1.20 per share and has a dividend yield of 2.7%. Sompo pays out 6.0% of its earnings in the form of a dividend. Equitable pays out -42.3% 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. Equitable has increased its dividend for 2 consecutive years. Equitable is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of recent recommendations and price targets for Sompo and Equitable, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sompo	0	0	0	0	0.00
Equitable	2	0	9	2	2.85

Equitable has a consensus target price of $58.64, suggesting a potential upside of 33.98%. Given Equitable’s stronger consensus rating and higher probable upside, analysts plainly believe Equitable is more favorable than Sompo.

Profitability

This table compares Sompo and Equitable’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sompo	11.95%	13.42%	3.89%
Equitable	-7.26%	232.29%	0.58%

Volatility and Risk

Sompo has a beta of 0.32, meaning that its stock price is 68% less volatile than the S&P 500. Comparatively, Equitable has a beta of 1.1, meaning that its stock price is 10% more volatile than the S&P 500.

Summary

Equitable beats Sompo on 12 of the 18 factors compared between the two stocks.

About Sompo

Sompo Holdings, Inc. provides property and casualty (P&C) insurance services in Japan and internationally. The company operates through Domestic P&C Insurance Business, Overseas Insurance Business, Domestic Life Insurance Business, and Nursing Care & Seniors Business segments. It offers various P&C insurance products, including automobile, fire, personal accident, and marine, as well as security, risk management, assistance, and warranty services; and life insurance products. The company also provides nursing care and seniors services; and customer security, health, and wellbeing support services. In addition, it offers asset management services; home remodeling services; and health support services comprising health guidance and employee assistance programs. The company was formerly known as Sompo Japan Nipponkoa Holdings, Inc. and changed its name to Sompo Holdings, Inc. in October 2016. The company was incorporated in 2010 and is headquartered in Tokyo, Japan.

About Equitable

Equitable Holdings, Inc., together with its consolidated subsidiaries, operates as a diversified financial services company worldwide. The company operates through six segments: Individual Retirement, Group Retirement, Investment Management and Research, Protection Solutions, Wealth Management, and Legacy. The Individual Retirement segment offers a suite of variable annuity products primarily to affluent and high net worth individuals. The Group Retirement segment provides tax-deferred investment and retirement services or products to plans sponsored by educational entities, municipalities, and not-for-profit entities, as well as small and medium-sized businesses. The Investment Management and Research segment offers diversified investment management, research, and related services to various clients through institutional. The Protection Solutions segment provides life insurance products, such as VUL insurance and IUL insurance, term life, and employee benefits business, such as dental, vision, life, as well as short- and long-term disability insurance products to small and medium-sized businesses. The Wealth Management segment offers discretionary and non-discretionary investment advisory accounts, financial planning and advice, life insurance, and annuity products. The Legacy segment consists of the capital intensive fixed-rate GMxB business that includes ROP death benefits. The company was formerly known as AXA Equitable Holdings, Inc. and changed its name to Equitable Holdings, Inc. in January 2020. Equitable Holdings, Inc. was founded in 1859 and is based in New York, New York.