Head-To-Head Survey: American International Group (NYSE:AIG) & Fidelity National Financial (NYSE:FNF)

American International Group (NYSE:AIG) and Fidelity National Financial (NYSE:FNF) are both large-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, risk, profitability, earnings, institutional ownership, valuation and dividends.

Insider & Institutional Ownership

90.6% of American International Group shares are owned by institutional investors. Comparatively, 81.2% of Fidelity National Financial shares are owned by institutional investors. 0.5% of American International Group shares are owned by company insiders. Comparatively, 5.5% of Fidelity National Financial shares are owned 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.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for American International Group and Fidelity National Financial, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
American International Group	0	11	8	2	2.57
Fidelity National Financial	0	1	4	0	2.80

American International Group currently has a consensus price target of $89.44, suggesting a potential upside of 17.43%. Fidelity National Financial has a consensus price target of $70.00, suggesting a potential upside of 17.79%. Given Fidelity National Financial’s stronger consensus rating and higher probable upside, analysts plainly believe Fidelity National Financial is more favorable than American International Group.

Risk and Volatility

American International Group has a beta of 0.73, meaning that its share price is 27% less volatile than the S&P 500. Comparatively, Fidelity National Financial has a beta of 1.05, meaning that its share price is 5% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
American International Group	11.51%	7.88%	2.04%
Fidelity National Financial	7.93%	14.30%	1.28%

Earnings and Valuation

This table compares American International Group and Fidelity National 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	$27.39 billion	1.50	-$1.40 billion	$5.50	13.85
Fidelity National Financial	$13.72 billion	1.17	$1.27 billion	$4.30	13.82

Fidelity National Financial has lower revenue, but higher earnings than American International Group. Fidelity National 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.

Dividends

American International Group pays an annual dividend of $1.80 per share and has a dividend yield of 2.4%. Fidelity National Financial pays an annual dividend of $2.08 per share and has a dividend yield of 3.5%. American International Group pays out 32.7% of its earnings in the form of a dividend. Fidelity National Financial pays out 48.4% 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 and Fidelity National Financial has raised its dividend for 1 consecutive years.

Summary

American International Group beats Fidelity National Financial on 10 of the 18 factors compared between the two stocks.

About American International Group

American International Group, Inc. offers insurance products for commercial, institutional, and individual customers in North America and internationally. It operates through three segments: General Insurance, Life and Retirement, and Other Operations. The General Insurance segment provides commercial and industrial property insurance, including business interruption and package insurance that cover exposure to made and natural disasters; general liability, environmental, commercial automobile liability, workers’ compensation, excess casualty, and crisis management insurance products; and professional liability insurance. This segment offers marine, energy-related property insurance, aviation, political risk, trade credit, trade finance, and portfolio solutions, as well as operates reinsurance business; voluntary and sponsor-paid personal accident, and supplemental health products; and personal auto and personal property insurance. Its Life and Retirement segment offers individual retirement products, including variable, fixed index, and fixed annuities, as well as retail mutual funds; group retirement products comprising record-keeping, plan administrative and compliance services, financial planning, and advisory solutions; life insurance, including term and universal life insurance; and institutional markets products, which includes wrap products, structured settlement, pension risk transfer annuities, corporate and bank-owned life insurance, high net worth, and guaranteed investment contract products. It distributes its products through a network of brokers, agents, advisors, banks, and other distributors. The company was founded in 1919 and is headquartered in New York, New York.

About Fidelity National Financial

Fidelity National Financial, Inc., together with its subsidiaries, provides various insurance products in the United States. The company operates through Title, F&G, and Corporate and Other segments. It offers title insurance, escrow, and other title related services, including trust activities, trustee sales guarantees, recordings and reconveyances, and home warranty products. The company also provides technology and transaction services to the real estate and mortgage industries; and mortgage transaction services, including title-related services and facilitation of production and management of mortgage loans. In addition, it offers annuity and life insurance products, such as deferred and immediate annuities, as well as indexed universal life insurance products; and funding agreements and pension risk transfer (PRT) solutions. Further, the company engages in the real estate brokerage business. Fidelity National Financial, Inc. was incorporated in 2005 and is headquartered in Jacksonville, Florida.