American Equity Investment Life (AEL) vs. Its Rivals Critical Analysis

American Equity Investment Life (NYSE: AEL) is one of 38 publicly-traded companies in the “Life insurance” industry, but how does it compare to its competitors? We will compare American Equity Investment Life to related companies based on the strength of its analyst recommendations, dividends, profitability, institutional ownership, valuation, risk and earnings.

Analyst Recommendations

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This is a summary of current recommendations for American Equity Investment Life and its competitors, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American Equity Investment Life 1 4 2 0 2.14
American Equity Investment Life Competitors 318 1129 1519 83 2.45

American Equity Investment Life currently has a consensus target price of $30.86, indicating a potential upside of 0.15%. As a group, “Life insurance” companies have a potential upside of 7.46%. Given American Equity Investment Life’s competitors stronger consensus rating and higher possible upside, analysts plainly believe American Equity Investment Life has less favorable growth aspects than its competitors.

Dividends

American Equity Investment Life pays an annual dividend of $0.26 per share and has a dividend yield of 0.8%. American Equity Investment Life pays out 8.2% of its earnings in the form of a dividend. As a group, “Life insurance” companies pay a dividend yield of 2.1% and pay out 28.7% of their earnings in the form of a dividend. American Equity Investment Life has raised its dividend for 5 consecutive years.

Volatility & Risk

American Equity Investment Life has a beta of 2.45, indicating that its stock price is 145% more volatile than the S&P 500. Comparatively, American Equity Investment Life’s competitors have a beta of 1.06, indicating that their average stock price is 6% more volatile than the S&P 500.

Institutional & Insider Ownership

93.6% of American Equity Investment Life shares are held by institutional investors. Comparatively, 51.0% of shares of all “Life insurance” companies are held by institutional investors. 4.1% of American Equity Investment Life shares are held by insiders. Comparatively, 17.9% of shares of all “Life insurance” companies are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares American Equity Investment Life and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
American Equity Investment Life 4.49% 10.65% 0.48%
American Equity Investment Life Competitors 4.46% 4.86% 0.81%

Earnings & Valuation

This table compares American Equity Investment Life and its competitors gross revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
American Equity Investment Life $3.89 billion $174.64 million 9.75
American Equity Investment Life Competitors $22.05 billion $1.25 billion 16.22

American Equity Investment Life’s competitors have higher revenue and earnings than American Equity Investment Life. American Equity Investment Life is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Summary

American Equity Investment Life competitors beat American Equity Investment Life on 10 of the 15 factors compared.

American Equity Investment Life Company Profile

American Equity Investment Life Holding Company, through its subsidiaries, provides life insurance products and services in the United States. The company issues fixed index and rate annuities; and single premium immediate annuities, as well as life insurance products. The company markets its products through various distribution channels, including national marketing organizations, broker/dealers, banks, and registered investment advisors. American Equity Investment Life Holding Company was founded in 1995 and is based in West Des Moines, Iowa.

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