American International Group (NYSE: AIG) and Assurant (NYSE:AIZ) are both mid-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, earnings, valuation, risk, profitabiliy, analyst recommendations and dividends.

Dividends

American International Group pays an annual dividend of $1.28 per share and has a dividend yield of 2.0%. Assurant pays an annual dividend of $2.12 per share and has a dividend yield of 2.0%. American International Group pays out 412.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Assurant pays out 26.0% of its earnings in the form of a dividend. American International Group has raised its dividend for 13 consecutive years and Assurant has raised its dividend for 3 consecutive years. Assurant is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation and Earnings

This table compares American International Group and Assurant’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
American International Group $52.09 billion 1.14 $6.13 billion $0.31 207.10
Assurant $6.94 billion 0.83 $943.68 million $8.14 12.95

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

Analyst Ratings

This is a summary of current recommendations and price targets for American International Group and Assurant, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American International Group 1 2 9 1 2.77
Assurant 1 2 1 0 2.00

American International Group currently has a consensus target price of $64.07, suggesting a potential downside of 0.21%. Assurant has a consensus target price of $98.33, suggesting a potential downside of 6.71%. Given American International Group’s stronger consensus rating and higher probable upside, equities analysts clearly believe American International Group is more favorable than Assurant.

Institutional & Insider Ownership

86.2% of American International Group shares are held by institutional investors. Comparatively, 92.3% of Assurant shares are held by institutional investors. 0.5% of American International Group shares are held by insiders. Comparatively, 0.8% of Assurant shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares American International Group and Assurant’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
American International Group 1.00% 5.36% 0.88%
Assurant 7.05% 6.51% 0.95%

Volatility & Risk

American International Group has a beta of 1.13, indicating that its share price is 13% more volatile than the S&P 500. Comparatively, Assurant has a beta of 0.77, indicating that its share price is 23% less volatile than the S&P 500.

American International Group Company Profile

American International Group, Inc. is a global insurance company. The Company provides a range of property casualty insurance, life insurance, retirement products and other financial services to commercial and individual customers. Its segments include Commercial Insurance, Consumer Insurance, Other Operations and Legacy Portfolio. The Commercial Insurance segment is a provider of insurance products and services for commercial customers. It includes property casualty networks. The Consumer Insurance segment is a franchise that brings together a portfolio of retirement, life insurance and personal insurance products offered through multiple distribution networks. The Other Operations segment consists of businesses and items not attributed to its Commercial and Consumer modules or its Legacy Portfolio. The Legacy Portfolio segment includes Legacy Property and Casualty Run-Off Insurance Lines, as well as Legacy Life Insurance Run-Off Lines and Legacy Investments.

Assurant Company Profile

Assurant, Inc. is a provider of risk management solutions in the housing and lifestyle markets. The Company operates in North America, Latin America, Europe and Asia. The Company’s segments include Global Housing, Global Lifestyle and Global Preneed. Through its Global Housing segment, it provides lender-placed homeowners, manufactured housing and flood insurance; renters insurance and related products (multi-family housing business), and field services, valuation services and other property risk management services (mortgage solutions business). Through its Global Lifestyle segment, it provides mobile device protection products and related services and extended service products and related services for consumer electronics and appliances (global connected living business); vehicle protection services, and credit insurance. The Global Preneed segment provides pre-funded funeral insurance and annuity products. Its Global Preneed Segment operates in the United States and Canada.

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