Reviewing American Financial Group (AFG) and MBIA (MBI)
American Financial Group (NYSE: AFG) and MBIA (NYSE:MBI) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their risk, profitability, earnings, dividends, institutional ownership, analyst recommendations and valuation.
Valuation and Earnings
This table compares American Financial Group and MBIA’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|American Financial Group||$6.87 billion||1.46||$475.00 million||$5.30||21.42|
|MBIA||$433.00 million||1.77||-$1.61 billion||($12.89)||-0.67|
Institutional and Insider Ownership
62.3% of American Financial Group shares are held by institutional investors. 13.7% of American Financial Group shares are held by company insiders. Comparatively, 4.1% of MBIA shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Volatility & Risk
American Financial Group has a beta of 0.8, suggesting that its stock price is 20% less volatile than the S&P 500. Comparatively, MBIA has a beta of 2.15, suggesting that its stock price is 115% more volatile than the S&P 500.
American Financial Group pays an annual dividend of $1.40 per share and has a dividend yield of 1.2%. MBIA does not pay a dividend. American Financial Group pays out 26.4% of its earnings in the form of a dividend. MBIA has raised its dividend for 12 consecutive years.
This table compares American Financial Group and MBIA’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|American Financial Group||6.92%||11.09%||0.99%|
This is a breakdown of recent ratings for American Financial Group and MBIA, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|American Financial Group||0||1||2||0||2.67|
American Financial Group currently has a consensus price target of $114.67, suggesting a potential upside of 1.01%. MBIA has a consensus price target of $14.50, suggesting a potential upside of 67.82%. Given MBIA’s higher possible upside, analysts plainly believe MBIA is more favorable than American Financial Group.
American Financial Group beats MBIA on 9 of the 14 factors compared between the two stocks.
American Financial Group Company Profile
American Financial Group, Inc. (AFG) is a holding company engaged primarily in property and casualty insurance businesses. The Company, through Great American Insurance Group, focuses on commercial products for businesses, and is engaged in the sale of fixed and fixed-indexed annuities in the retail, financial institutions and education markets. It has four segments: Property and casualty insurance, Annuity, Run-off long-term care and life, and Other. It reports its property and casualty insurance business in specialty sub-segments, including Property and transportation, Specialty casualty and Specialty financial. AFG sells traditional fixed and fixed-indexed annuities in the retail, financial institutions and education markets through independent producers and through direct relationships with certain financial institutions. AFG also sells single premium annuities in financial institutions through direct relationships with certain banks and through independent agents and brokers.
MBIA Company Profile
MBIA Inc. is a holding company. The Company, through its subsidiaries, is engaged in the financial guarantee insurance businesses in the industry. The Company manages its business within three segments: United States (U.S.) public finance insurance; corporate, and international and structured finance insurance. The U.S. public finance insurance business is primarily operated through National Public Finance Guarantee Corporation. The corporate segment consists of general corporate activities, including providing general support services, including management, legal, accounting, treasury, information technology, and insurance portfolio surveillance, to other operating businesses, and asset and capital management. The international and structured finance insurance business is primarily operated through MBIA Insurance Corporation and its subsidiaries.
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