Hartford Financial Services Group, Inc. (The) (NYSE: HIG) and American International Group (NYSE:AIG) are both large-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, risk, valuation, institutional ownership, profitability, dividends and analyst recommendations.

Risk and Volatility

Hartford Financial Services Group, Inc. (The) has a beta of 0.93, suggesting that its share price is 7% less volatile than the S&P 500. Comparatively, American International Group has a beta of 1.14, suggesting that its share price is 14% more volatile than the S&P 500.

Dividends

Hartford Financial Services Group, Inc. (The) pays an annual dividend of $0.92 per share and has a dividend yield of 1.7%. American International Group pays an annual dividend of $1.28 per share and has a dividend yield of 2.1%. Hartford Financial Services Group, Inc. (The) pays out 51.4% of its earnings in the form of a dividend. American International Group pays out -711.1% 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. Hartford Financial Services Group, Inc. (The) has raised its dividend for 4 consecutive years and American International Group has raised its dividend for 3 consecutive years. American International Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Hartford Financial Services Group, Inc. (The) and American International Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hartford Financial Services Group, Inc. (The) 3.73% 9.13% 0.71%
American International Group -0.53% 6.06% 0.95%

Earnings & Valuation

This table compares Hartford Financial Services Group, Inc. (The) and American International Group’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Hartford Financial Services Group, Inc. (The) $18.55 billion 1.07 $1.28 billion $1.79 30.44
American International Group $49.87 billion 1.10 $4.99 billion ($0.18) -336.98

American International Group has higher revenue and earnings than Hartford Financial Services Group, Inc. (The). American International Group is trading at a lower price-to-earnings ratio than Hartford Financial Services Group, Inc. (The), indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent recommendations for Hartford Financial Services Group, Inc. (The) and American International Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hartford Financial Services Group, Inc. (The) 0 4 5 0 2.56
American International Group 1 3 9 0 2.62

Hartford Financial Services Group, Inc. (The) currently has a consensus target price of $55.38, indicating a potential upside of 1.62%. American International Group has a consensus target price of $68.90, indicating a potential upside of 13.59%. Given American International Group’s stronger consensus rating and higher probable upside, analysts plainly believe American International Group is more favorable than Hartford Financial Services Group, Inc. (The).

Institutional & Insider Ownership

88.3% of Hartford Financial Services Group, Inc. (The) shares are held by institutional investors. Comparatively, 84.0% of American International Group shares are held by institutional investors. 1.5% of Hartford Financial Services Group, Inc. (The) shares are held by company insiders. Comparatively, 0.5% of American International Group shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

American International Group beats Hartford Financial Services Group, Inc. (The) on 10 of the 17 factors compared between the two stocks.

About Hartford Financial Services Group, Inc. (The)

The Hartford Financial Services Group, Inc. is a holding company for insurance and financial services subsidiaries. The Company’s segments include Commercial Lines, which provides workers’ compensation, property, automobile, marine, livestock, liability and umbrella coverages primarily throughout the United States; Personal Lines, which provides automobile, homeowners and personal umbrella coverages to individuals across the United States; Group Benefits, which provides group life, accident and disability coverage, and other products and services; Property & Casualty Other Operations, which includes certain property and casualty operations; Mutual Funds, which provides investment management, administration, product distribution and related services to investors; Talcott Resolution, which consists of the run-off of the Company’s the United States individual and institutional annuity, and Private Placement Life Insurance (PPLI) businesses, and Corporate.

About American International Group

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.

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