American International Group (NYSE:AIG) and XL Group (NYSE:XL) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, profitability, valuation, institutional ownership, dividends, risk and analyst recommendations.

Profitability

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

Net Margins Return on Equity Return on Assets
American International Group -12.73% 3.44% 0.43%
XL Group N/A N/A N/A

Dividends

American International Group pays an annual dividend of $1.28 per share and has a dividend yield of 3.0%. XL Group pays an annual dividend of $0.88 per share. American International Group pays out 53.3% of its earnings in the form of a dividend. XL Group has increased its dividend for 6 consecutive years.

Earnings & Valuation

This table compares American International Group and XL Group’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
American International Group $49.52 billion 0.77 -$6.08 billion $2.40 18.01
XL Group N/A N/A N/A N/A N/A

XL Group has lower revenue, but higher earnings than American International Group.

Institutional and Insider Ownership

89.1% of American International Group shares are held by institutional investors. Comparatively, 78.5% of XL Group shares are held by institutional investors. 0.1% of American International Group shares are held by insiders. Comparatively, 3.0% of XL Group 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.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for American International Group and XL Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American International Group 0 3 9 0 2.75
XL Group 0 7 0 0 2.00

American International Group presently has a consensus price target of $55.44, suggesting a potential upside of 28.24%. XL Group has a consensus price target of $50.90, suggesting a potential upside of ∞. Given XL Group’s higher probable upside, analysts plainly believe XL Group is more favorable than American International Group.

Summary

American International Group beats XL Group on 7 of the 12 factors compared between the two stocks.

About American International Group

American International Group, Inc. provides insurance products for commercial, institutional, and individual customers primarily in the United States, Europe, and Japan. The company's General Insurance segment offers general liability, environmental, commercial automobile liability, workers' compensation, excess casualty, and crisis management insurance products, as well as various risk-sharing and other customized structured programs; commercial, industrial, and energy-related property insurance; and aerospace, political risk, trade credit, portfolio solutions, surety, and marine insurance. It also provides professional liability insurance products for a range of businesses and risks, including directors and officer's liability, mergers and acquisitions, fidelity, employment practices, fiduciary liability, cyber risk, kidnap and ransom, and errors and omissions insurance. In addition, this segment offers personal auto and property insurance, voluntary and sponsor-paid personal accident, and supplemental health products; extended warranty insurance products; and travel insurance products. Its Life and Retirement segment offers variable annuities, fixed index and fixed annuities, and retail mutual funds; group mutual funds, fixed annuities, and variable annuities, as well as individual annuity and investment products, and financial planning and advisory services; and term life and universal life insurance. This segment also provides stable value wrap products, and structured settlement and pension risk transfer annuities; and corporate- and bank-owned life insurance and guaranteed investment contracts. This segment sells its products through independent marketing organizations, independent insurance agents, financial advisors, direct marketing, banks, wirehouses, and broker-dealers. The company's Legacy Portfolio segment offers legacy insurance products. American International Group, Inc. was founded in 1919 and is headquartered in New York, New York.

About XL Group

XL Group Ltd, through its subsidiaries, operates as an insurance and reinsurance company worldwide. The company's Insurance segment offers primary and excess casualty, environmental liability, professional liability, property, excess and surplus lines, U.S. program/facilities, and construction business products. It also provides property and casualty products; insurance coverages for program administrators and managing general agents; mergers and acquisitions, and structured risk solutions; construction-related products and risk engineering services; and advanced loss of profits/delay in start-up, annual facilities for employers and contractors, commercial project builders, construction/contractors all risks, engineering/erection all risks, machinery breakdown, and other products. In addition, this segment offers aviation and satellite, marine, fine art and specie, private client, equine, livestock and aquaculture, energy, crisis management, political risk, credit and bond, London wholesale property and casualty, life, accident, and health products. The Reinsurance segment provides casualty reinsurance products, including general and professional liability, and automobile liability and workers' compensation; property reinsurance products comprising property catastrophe, risk excess of loss, and proportional products; specialty reinsurance products, such as energy, marine, aviation, and space; and other reinsurance products that include fidelity, surety, trade credit, accident and health, mortgage, and political risk. It also writes whole account capital gearing quota share contracts on select syndicates at Lloyd's. The company markets its products and services to the industrial, commercial, and professional firms; insurance companies; and other enterprises through international, national, and regional producers, acting as the brokers and representatives of policyholders. XL Group Ltd was founded in 1986 and is headquartered in Hamilton, Bermuda.

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