AMERICAN INTERNATIONAL GROUP (AIG) Stock Fundamental Analysis
USA - NYSE:AIG - US0268747849 - Common Stock
81.3 USD
-1.87 (-2.25%)
80.45 USD
-0.85 (-1.05%)
We assign a fundamental rating of 4 out of 10 to AIG. AIG was compared to 145 industry peers in the Insurance industry. There are concerns on the financial health of AIG while its profitability can be described as average. AIG is not valued too expensively and it also shows a decent growth rate.
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.
Each year in the past 5 years AIG had a positive operating cash flow.
1.2 Ratios
AIG has a Return On Assets (1.93%) which is in line with its industry peers.
Looking at the Return On Equity, with a value of 7.71%, AIG is doing worse than 60.69% of the companies in the same industry.
AIG has a Return On Invested Capital of 1.94%. This is comparable to the rest of the industry: AIG outperforms 46.21% of its industry peers.
The Average Return On Invested Capital over the past 3 years for AIG is below the industry average of 4.40%.
The 3 year average ROIC (1.44%) for AIG is below the current ROIC(1.94%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.93% | ||
| ROE | 7.71% | ||
| ROIC | 1.94% |
ROA(3y)0.58%
ROA(5y)0.49%
ROE(3y)9.84%
ROE(5y)7.24%
ROIC(3y)1.44%
ROIC(5y)1.21%
1.3 Margins
With a decent Profit Margin value of 11.51%, AIG is doing good in the industry, outperforming 70.34% of the companies in the same industry.
The Operating Margin of AIG (16.38%) is better than 70.34% of its industry peers.
AIG's Operating Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 16.38% | ||
| PM (TTM) | 11.51% | ||
| 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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), AIG is destroying value.
The number of shares outstanding for AIG has been reduced compared to 1 year ago.
AIG has less shares outstanding than it did 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 2.83. This is a good value and a sign of high solvency as AIG would need 2.83 years to pay back of all of its debts.
AIG has a Debt to FCF ratio (2.83) which is in line with its industry peers.
A Debt/Equity ratio of 0.22 indicates that AIG is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.22, AIG is in the better half of the industry, outperforming 66.21% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.22 | ||
| Debt/FCF | 2.83 | ||
| Altman-Z | N/A |
ROIC/WACC0.26
WACC7.5%
2.3 Liquidity
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | N/A | ||
| Quick Ratio | N/A |
3. Growth
3.1 Past
The earnings per share for AIG have decreased strongly by -12.95% in the last year.
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 small growth in Revenue. The Revenue has grown by 2.53% in the last year.
The Revenue for AIG have been decreasing by -11.79% on average. This is quite bad
EPS 1Y (TTM)-12.95%
EPS 3Y2.17%
EPS 5Y3.49%
EPS Q2Q%56.03%
Revenue 1Y (TTM)2.53%
Revenue growth 3Y-20.13%
Revenue growth 5Y-11.79%
Sales Q2Q%8.09%
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 10.98% 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 Y17.99%
EPS Next 2Y19.72%
EPS Next 3Y17.37%
EPS Next 5Y10.98%
Revenue Next Year4.54%
Revenue Next 2Y3.57%
Revenue Next 3Y3.9%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 14.75, which indicates a correct valuation of AIG.
Compared to the rest of the industry, the Price/Earnings ratio of AIG is on the same level as its industry peers.
AIG is valuated rather cheaply when we compare the Price/Earnings ratio to 27.02, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 10.39 indicates a reasonable valuation of AIG.
The rest of the industry has a similar Price/Forward Earnings ratio as AIG.
AIG is valuated cheaply when we compare the Price/Forward Earnings ratio to 22.57, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.75 | ||
| Fwd PE | 10.39 |
4.2 Price Multiples
68.28% of the companies in the same industry are more expensive than AIG, based on the Enterprise Value to EBITDA ratio.
The rest of the industry has a similar Price/Free Cash Flow ratio as AIG.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 13.78 | ||
| EV/EBITDA | 6.57 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
A more expensive valuation may be justified as AIG's earnings are expected to grow with 17.37% in the coming years.
PEG (NY)0.82
PEG (5Y)4.23
EPS Next 2Y19.72%
EPS Next 3Y17.37%
5. Dividend
5.1 Amount
AIG has a Yearly Dividend Yield of 2.26%.
AIG's Dividend Yield is a higher than the industry average which is at 3.33.
AIG's Dividend Yield is comparable with the S&P500 average which is at 2.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.26% |
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.
AIG has decreased its dividend recently.
Dividend Growth(5Y)3.87%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
AIG pays out 30.82% of its income as dividend. This is a sustainable payout ratio.
AIG's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP30.82%
EPS Next 2Y19.72%
EPS Next 3Y17.37%
81.3
-1.87 (-2.25%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners95.16%
Inst Owner Change0%
Ins Owners0.25%
Ins Owner Change-2.79%
Market Cap45.04B
Analysts72.5
Price Target89.47 (10.05%)
Short Float %1.92%
Short Ratio2.35
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.26% |
Yearly Dividend1.58
Dividend Growth(5Y)3.87%
DP30.82%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)13.43%
Min EPS beat(2)12.13%
Max EPS beat(2)14.73%
EPS beat(4)4
Avg EPS beat(4)10.51%
Min EPS beat(4)4.69%
Max EPS beat(4)14.73%
EPS beat(8)7
Avg EPS beat(8)6.42%
EPS beat(12)11
Avg EPS beat(12)8.45%
EPS beat(16)15
Avg EPS beat(16)9.89%
Revenue beat(2)2
Avg Revenue beat(2)3.21%
Min Revenue beat(2)2.88%
Max Revenue beat(2)3.53%
Revenue beat(4)3
Avg Revenue beat(4)3.5%
Min Revenue beat(4)-0.04%
Max Revenue beat(4)7.63%
Revenue beat(8)6
Avg Revenue beat(8)0.1%
Revenue beat(12)8
Avg Revenue beat(12)-12.87%
Revenue beat(16)12
Avg Revenue beat(16)-4.78%
PT rev (1m)0%
PT rev (3m)-2.48%
EPS NQ rev (1m)-0.9%
EPS NQ rev (3m)-0.91%
EPS NY rev (1m)0.02%
EPS NY rev (3m)0.78%
Revenue NQ rev (1m)0.06%
Revenue NQ rev (3m)-1.6%
Revenue NY rev (1m)0.03%
Revenue NY rev (3m)-0.35%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.75 | ||
| Fwd PE | 10.39 | ||
| P/S | 1.62 | ||
| P/FCF | 13.78 | ||
| P/OCF | 13.78 | ||
| P/B | 1.09 | ||
| P/tB | 1.18 | ||
| EV/EBITDA | 6.57 |
EPS(TTM)5.51
EY6.78%
EPS(NY)7.83
Fwd EY9.63%
FCF(TTM)5.9
FCFY7.26%
OCF(TTM)5.9
OCFY7.26%
SpS50.18
BVpS74.91
TBVpS68.68
PEG (NY)0.82
PEG (5Y)4.23
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.93% | ||
| ROE | 7.71% | ||
| ROCE | 2.77% | ||
| ROIC | 1.94% | ||
| ROICexc | 1.96% | ||
| ROICexgc | 2.84% | ||
| OM | 16.38% | ||
| PM (TTM) | 11.51% | ||
| GM | N/A | ||
| FCFM | 11.76% |
ROA(3y)0.58%
ROA(5y)0.49%
ROE(3y)9.84%
ROE(5y)7.24%
ROIC(3y)1.44%
ROIC(5y)1.21%
ROICexc(3y)1.45%
ROICexc(5y)1.22%
ROICexgc(3y)2.12%
ROICexgc(5y)1.8%
ROCE(3y)2.06%
ROCE(5y)1.74%
ROICexcg growth 3Y3.84%
ROICexcg growth 5Y12.95%
ROICexc growth 3Y5.2%
ROICexc growth 5Y12.23%
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-Score8
Asset Turnover0.17
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.22 | ||
| Debt/FCF | 2.83 | ||
| Debt/EBITDA | 1.13 | ||
| Cap/Depr | N/A | ||
| Cap/Sales | N/A | ||
| Interest Coverage | 7.74 | ||
| Cash Conversion | 40.12% | ||
| Profit Quality | 102.19% | ||
| Current Ratio | N/A | ||
| Quick Ratio | N/A | ||
| Altman-Z | N/A |
F-Score8
WACC7.5%
ROIC/WACC0.26
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)-12.95%
EPS 3Y2.17%
EPS 5Y3.49%
EPS Q2Q%56.03%
EPS Next Y17.99%
EPS Next 2Y19.72%
EPS Next 3Y17.37%
EPS Next 5Y10.98%
Revenue 1Y (TTM)2.53%
Revenue growth 3Y-20.13%
Revenue growth 5Y-11.79%
Sales Q2Q%8.09%
Revenue Next Year4.54%
Revenue Next 2Y3.57%
Revenue Next 3Y3.9%
Revenue Next 5Y4.77%
EBIT growth 1Y25.19%
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-25.87%
FCF growth 3Y-19.28%
FCF growth 5YN/A
OCF growth 1Y-25.87%
OCF growth 3Y-19.28%
OCF growth 5YN/A