Critical Analysis: American International Group (AIG) and Its Competitors

American International Group (NYSE:AIG) is one of 311 publicly-traded companies in the “Insurance” industry, but how does it compare to its peers? We will compare American International Group to related businesses based on the strength of its analyst recommendations, profitability, valuation, institutional ownership, dividends, risk and earnings.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
American International Group	11.86%	10.86%	2.70%
American International Group Competitors	9.45%	-10.05%	4.09%

Earnings & Valuation

This table compares American International Group and its peers revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
American International Group	$26.77 billion	$3.10 billion	13.50
American International Group Competitors	$15.26 billion	$1.70 billion	33.69

American International Group has higher revenue and earnings than its peers. American International Group is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Analyst Recommendations

This is a breakdown of current ratings and target prices for American International Group and its peers, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
American International Group	0	10	8	0	2.44
American International Group Competitors	3349	15720	16568	747	2.40

American International Group presently has a consensus target price of $88.00, indicating a potential upside of 6.19%. As a group, “Insurance” companies have a potential upside of 4.28%. Given American International Group’s stronger consensus rating and higher possible upside, research analysts plainly believe American International Group is more favorable than its peers.

Risk & Volatility

American International Group has a beta of 0.48, meaning that its stock price is 52% less volatile than the S&P 500. Comparatively, American International Group’s peers have a beta of -1.55, meaning that their average stock price is 255% less volatile than the S&P 500.

Dividends

American International Group pays an annual dividend of $2.00 per share and has a dividend yield of 2.4%. American International Group pays out 32.6% of its earnings in the form of a dividend. As a group, “Insurance” companies pay a dividend yield of 2.9% and pay out 31.1% of their earnings in the form of a dividend. American International Group has increased its dividend for 3 consecutive years. American International Group lags its peers as a dividend stock, given its lower dividend yield and higher payout ratio.

Institutional & Insider Ownership

90.6% of American International Group shares are held by institutional investors. Comparatively, 55.9% of shares of all “Insurance” companies are held by institutional investors. 0.6% of American International Group shares are held by insiders. Comparatively, 13.4% of shares of all “Insurance” companies are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

American International Group beats its peers on 8 of the 15 factors compared.

American International Group Company Profile

American International Group, Inc. (AIG) is a global insurance company headquartered in New York. Founded in Shanghai in 1919, the company has grown into an insurer serving businesses and individuals in the United States and international markets. AIG’s principal business is general insurance, including commercial and personal property and casualty coverage. Its offerings include products and services for businesses, multinational organizations and individuals, with coverage spanning areas such as property, liability, accident and specialty risks.