American International Group (NYSE: AIG) and American National Insurance (NASDAQ:ANAT) are both mid-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, profitability, earnings, dividends, risk and institutional ownership.

Dividends

American International Group pays an annual dividend of $1.28 per share and has a dividend yield of 2.0%. American National Insurance pays an annual dividend of $3.28 per share and has a dividend yield of 2.7%. American International Group pays out -711.1% of its earnings in the form of a dividend. American National Insurance pays out 45.4% 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. American International Group has raised its dividend for 3 consecutive years.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
American International Group $49.87 billion 1.15 $4.99 billion ($0.18) -352.42
American National Insurance $3.28 billion 0.99 $260.52 million $7.23 16.66

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

Profitability

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

Net Margins Return on Equity Return on Assets
American International Group -0.53% 6.06% 0.95%
American National Insurance 5.95% 2.61% 0.50%

Volatility & Risk

American International Group has a beta of 1.16, indicating that its share price is 16% more volatile than the S&P 500. Comparatively, American National Insurance has a beta of 1.34, indicating that its share price is 34% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for American International Group and American National Insurance, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American International Group 2 3 10 0 2.53
American National Insurance 0 0 0 0 N/A

American International Group presently has a consensus target price of $68.12, suggesting a potential upside of 7.38%. Given American International Group’s higher possible upside, equities research analysts clearly believe American International Group is more favorable than American National Insurance.

Institutional & Insider Ownership

84.0% of American International Group shares are held by institutional investors. Comparatively, 65.2% of American National Insurance shares are held by institutional investors. 0.5% of American International Group shares are held by company insiders. Comparatively, 23.5% of American National Insurance shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

American International Group beats American National Insurance on 10 of the 16 factors compared between the two stocks.

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.

American National Insurance Company Profile

American National Insurance Company is engaged in life insurance, annuities, and property and casualty insurance. The Company also offers limited health insurance. Its family of companies includes six life insurance companies, eight property and casualty insurance companies, and various non-insurance subsidiaries. Its business segments include Life, which offers products, such as Whole Life, Term Life, Universal Life, Variable Universal Life and Credit Life Insurance; Annuity, including products, such as Deferred Annuity, Single Premium Immediate Annuity and Variable Annuity; Health, including, such as Medicare Supplement, Supplemental Insurance, Stop-Loss, Credit Disability and Medical Expense; Property and Casualty, which offers products, such as Personal Lines, Commercial Lines and Credit-Related Property Insurance products, and Corporate and Other, which consists of its invested assets that are not used to support insurance activities, and non-insurance subsidiaries.

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