American International Group (NYSE: AIG) and Fortegra Financial (NYSE:FRF) are both financials companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, risk, earnings, profitability, valuation and dividends.
Insider & Institutional Ownership
86.7% of American International Group shares are owned by institutional investors. 0.5% of American International Group shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
This table compares American International Group and Fortegra Financial’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|American International Group||-12.62%||3.10%||0.45%|
Volatility and Risk
American International Group has a beta of 1.17, meaning that its share price is 17% more volatile than the S&P 500. Comparatively, Fortegra Financial has a beta of 0.89, meaning that its share price is 11% less volatile than the S&P 500.
This is a breakdown of recent ratings and price targets for American International Group and Fortegra Financial, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|American International Group||1||5||8||0||2.50|
American International Group presently has a consensus price target of $66.55, suggesting a potential upside of 12.77%. Given American International Group’s higher probable upside, equities analysts clearly believe American International Group is more favorable than Fortegra Financial.
American International Group pays an annual dividend of $1.28 per share and has a dividend yield of 2.2%. Fortegra Financial does not pay a dividend. American International Group pays out 256.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Earnings & Valuation
This table compares American International Group and Fortegra Financial’s top-line 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||1.08||-$6.08 billion||$0.50||118.02|
Fortegra Financial has lower revenue, but higher earnings than American International Group. Fortegra Financial 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.
American International Group beats Fortegra Financial on 10 of the 13 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.
Fortegra Financial Company Profile
Fortegra Financial Corporation is specializing in insurance products and services. The Company’s business process outsourcing segment offers various administrative services under the Consecta and Pacific Benefits Group Northwest, LLC brand names to insurance and other financial services companies. The Company’s Payment Protection segment delivers credit insurance, debt protection, warranty and service contracts, and motor club solutions under the Life of the South, Continental Car Club, United Motor Club, and Auto Knight Motor Club brand names to consumer finance companies, regional banks, community banks, retailers, small loan companies, warranty administrators, automobile dealers, vacation ownership developers, and credit unions.
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