AMERICAN INTERNATIONAL GROUP (AIG) Stock Fundamental Analysis
NYSE:AIG - New York Stock Exchange, Inc. - US0268747849 - Common Stock - Currency: USD
We assign a fundamental rating of 3 out of 10 to AIG. AIG was compared to 145 industry peers in the Insurance industry. AIG has a bad profitability rating. Also its financial health evaluation is rather negative. AIG has a valuation in line with the averages, but on the other hand it scores bad on growth.
1. Profitability
1.1 Basic Checks
In the past year AIG was profitable.
In the past year AIG had a positive cash flow from operations.
In multiple years AIG reported negative net income over the last 5 years.
AIG had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
AIG has a Return On Assets of -1.19%. This is amonst the worse of the industry: AIG underperforms 85.52% of its industry peers.
With a Return On Equity value of -4.64%, AIG is not doing good in the industry: 86.90% of the companies in the same industry are doing better.
AIG's Return On Invested Capital of 1.57% is in line compared to the rest of the industry. AIG outperforms 45.52% of its industry peers.
The Average Return On Invested Capital over the past 3 years for AIG is below the industry average of 4.07%.
The last Return On Invested Capital (1.57%) for AIG is above the 3 year average (1.43%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -1.19% | ||
| ROE | -4.64% | ||
| ROIC | 1.57% |
ROA(3y)0.58%
ROA(5y)0.49%
ROE(3y)9.84%
ROE(5y)7.24%
ROIC(3y)1.43%
ROIC(5y)1.21%
1.3 Margins
With a decent Operating Margin value of 13.22%, AIG is doing good in the industry, outperforming 62.07% of the companies in the same industry.
AIG's Operating Margin has been stable in the last couple of years.
AIG does not have Profit Margin and Gross Margin available, so we won't be analyzing them here.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 13.22% | ||
| PM (TTM) | N/A | ||
| GM | N/A |
OM growth 3Y-15.59%
OM growth 5Y-0.01%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
AIG has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
AIG has less shares outstanding than it did 1 year ago.
The number of shares outstanding for AIG has been reduced compared to 5 years ago.
The debt/assets ratio for AIG is higher compared to a year ago.
2.2 Solvency
AIG has a debt to FCF ratio of 3.24. This is a good value and a sign of high solvency as AIG would need 3.24 years to pay back of all of its debts.
The Debt to FCF ratio of AIG (3.24) is worse than 60.69% of its industry peers.
A Debt/Equity ratio of 0.21 indicates that AIG is not too dependend on debt financing.
AIG's Debt to Equity ratio of 0.21 is fine compared to the rest of the industry. AIG outperforms 71.72% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.21 | ||
| Debt/FCF | 3.24 | ||
| Altman-Z | N/A |
ROIC/WACC0.2
WACC7.76%
2.3 Liquidity
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | N/A | ||
| Quick Ratio | N/A |
3. Growth
3.1 Past
AIG shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -29.77%.
The Earnings Per Share has been growing slightly by 3.49% on average over the past years.
Looking at the last year, AIG shows a decrease in Revenue. The Revenue has decreased by -2.58% in the last year.
The Revenue for AIG have been decreasing by -11.79% on average. This is quite bad
EPS 1Y (TTM)-29.77%
EPS 3Y2.17%
EPS 5Y3.49%
EPS Q2Q%-33.9%
Revenue 1Y (TTM)-2.58%
Revenue growth 3Y-20.13%
Revenue growth 5Y-11.79%
Sales Q2Q%-45.57%
3.2 Future
Based on estimates for the next years, AIG will show a quite strong growth in Earnings Per Share. The EPS will grow by 11.00% on average per year.
Based on estimates for the next years, AIG will show a small growth in Revenue. The Revenue will grow by 4.77% on average per year.
EPS Next Y16.47%
EPS Next 2Y20.18%
EPS Next 3Y18.03%
EPS Next 5Y11%
Revenue Next Year4.73%
Revenue Next 2Y4.08%
Revenue Next 3Y5.25%
Revenue Next 5Y4.77%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 16.83, AIG is valued correctly.
AIG's Price/Earnings ratio is a bit more expensive when compared to the industry. AIG is more expensive than 61.38% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.30. AIG is valued slightly cheaper when compared to this.
With a Price/Forward Earnings ratio of 10.37, the valuation of AIG can be described as very reasonable.
The rest of the industry has a similar Price/Forward Earnings ratio as AIG.
When comparing the Price/Forward Earnings ratio of AIG to the average of the S&P500 Index (21.76), we can say AIG is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.83 | ||
| Fwd PE | 10.37 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, AIG is valued a bit cheaper than 64.14% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, AIG is valued a bit more expensive than the industry average as 62.07% of the companies are valued more cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 17.47 | ||
| EV/EBITDA | 7.62 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
A more expensive valuation may be justified as AIG's earnings are expected to grow with 18.03% in the coming years.
PEG (NY)1.02
PEG (5Y)4.83
EPS Next 2Y20.18%
EPS Next 3Y18.03%
5. Dividend
5.1 Amount
AIG has a Yearly Dividend Yield of 2.18%.
Compared to an average industry Dividend Yield of 3.67, AIG has a dividend in line with its industry peers.
AIG's Dividend Yield is comparable with the S&P500 average which is at 2.35.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.18% |
5.2 History
The dividend of AIG has a limited annual growth rate of 3.87%.
AIG has been paying a dividend for at least 10 years, so it has a reliable track record.
The dividend of AIG decreased recently.
Dividend Growth(5Y)3.87%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
AIG has negative earnings and hence a negative payout ratio. The dividend may be in danger.
The dividend of AIG is growing, but earnings are growing more, so the dividend growth is sustainable.
DP-51.66%
EPS Next 2Y20.18%
EPS Next 3Y18.03%
81.78
-0.68 (-0.82%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners95.85%
Inst Owner Change-0.07%
Ins Owners0.24%
Ins Owner Change6.56%
Market Cap47.13B
Analysts74.78
Price Target91.75 (12.19%)
Short Float %2.05%
Short Ratio3
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.18% |
Yearly Dividend1.58
Dividend Growth(5Y)3.87%
DP-51.66%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)9.71%
Min EPS beat(2)4.69%
Max EPS beat(2)14.73%
EPS beat(4)3
Avg EPS beat(4)4.59%
Min EPS beat(4)-11.57%
Max EPS beat(4)14.73%
EPS beat(8)7
Avg EPS beat(8)6.06%
EPS beat(12)11
Avg EPS beat(12)8.06%
EPS beat(16)15
Avg EPS beat(16)10.7%
Revenue beat(2)2
Avg Revenue beat(2)5.26%
Min Revenue beat(2)2.88%
Max Revenue beat(2)7.63%
Revenue beat(4)3
Avg Revenue beat(4)3.07%
Min Revenue beat(4)-0.04%
Max Revenue beat(4)7.63%
Revenue beat(8)6
Avg Revenue beat(8)1.37%
Revenue beat(12)8
Avg Revenue beat(12)-11.48%
Revenue beat(16)11
Avg Revenue beat(16)-5.38%
PT rev (1m)0%
PT rev (3m)4.35%
EPS NQ rev (1m)-1.59%
EPS NQ rev (3m)-3.12%
EPS NY rev (1m)-0.44%
EPS NY rev (3m)1.71%
Revenue NQ rev (1m)-0.13%
Revenue NQ rev (3m)0.04%
Revenue NY rev (1m)-0.4%
Revenue NY rev (3m)5.09%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.83 | ||
| Fwd PE | 10.37 | ||
| P/S | 1.73 | ||
| P/FCF | 17.47 | ||
| P/OCF | 17.47 | ||
| P/B | 1.14 | ||
| P/tB | 1.24 | ||
| EV/EBITDA | 7.62 |
EPS(TTM)4.86
EY5.94%
EPS(NY)7.89
Fwd EY9.64%
FCF(TTM)4.68
FCFY5.72%
OCF(TTM)4.68
OCFY5.72%
SpS47.32
BVpS71.89
TBVpS65.99
PEG (NY)1.02
PEG (5Y)4.83
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -1.19% | ||
| ROE | -4.64% | ||
| ROCE | 2.25% | ||
| ROIC | 1.57% | ||
| ROICexc | 1.59% | ||
| ROICexgc | 2.32% | ||
| OM | 13.22% | ||
| PM (TTM) | N/A | ||
| GM | N/A | ||
| FCFM | 9.89% |
ROA(3y)0.58%
ROA(5y)0.49%
ROE(3y)9.84%
ROE(5y)7.24%
ROIC(3y)1.43%
ROIC(5y)1.21%
ROICexc(3y)1.44%
ROICexc(5y)1.22%
ROICexgc(3y)2.11%
ROICexgc(5y)1.79%
ROCE(3y)2.06%
ROCE(5y)1.74%
ROICexcg growth 3Y3.35%
ROICexcg growth 5Y12.63%
ROICexc growth 3Y4.86%
ROICexc growth 5Y12.01%
OM growth 3Y-15.59%
OM growth 5Y-0.01%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3YN/A
GM growth 5YN/A
F-Score5
Asset Turnover0.17
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.21 | ||
| Debt/FCF | 3.24 | ||
| Debt/EBITDA | 1.2 | ||
| Cap/Depr | N/A | ||
| Cap/Sales | N/A | ||
| Interest Coverage | 4.81 | ||
| Cash Conversion | 37.71% | ||
| Profit Quality | N/A | ||
| Current Ratio | N/A | ||
| Quick Ratio | N/A | ||
| Altman-Z | N/A |
F-Score5
WACC7.76%
ROIC/WACC0.2
Cap/Depr(3y)N/A
Cap/Depr(5y)N/A
Cap/Sales(3y)N/A
Cap/Sales(5y)N/A
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-29.77%
EPS 3Y2.17%
EPS 5Y3.49%
EPS Q2Q%-33.9%
EPS Next Y16.47%
EPS Next 2Y20.18%
EPS Next 3Y18.03%
EPS Next 5Y11%
Revenue 1Y (TTM)-2.58%
Revenue growth 3Y-20.13%
Revenue growth 5Y-11.79%
Sales Q2Q%-45.57%
Revenue Next Year4.73%
Revenue Next 2Y4.08%
Revenue Next 3Y5.25%
Revenue Next 5Y4.77%
EBIT growth 1Y-10.46%
EBIT growth 3Y-32.58%
EBIT growth 5Y-11.79%
EBIT Next Year134.64%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-41.25%
FCF growth 3Y-19.28%
FCF growth 5YN/A
OCF growth 1Y-41.25%
OCF growth 3Y-19.28%
OCF growth 5YN/A