Head-To-Head Review: AA (OTCMKTS:AATDF) versus MBIA (NYSE:MBI)

AA (OTCMKTS:AATDF) and MBIA (NYSE:MBI) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, institutional ownership, risk, earnings, analyst recommendations, dividends and profitability.

Analyst Ratings

This is a breakdown of recent ratings for AA and MBIA, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AA	0	0	0	0	0.00
MBIA	1	0	1	0	2.00

MBIA has a consensus price target of $8.50, indicating a potential upside of 35.03%. Given MBIA’s stronger consensus rating and higher probable upside, analysts plainly believe MBIA is more favorable than AA.

Valuation and Earnings

This table compares AA and MBIA”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AA	N/A	N/A	N/A	N/A	N/A
MBIA	$80.00 million	3.97	-$177.00 million	($3.58)	-1.76

AA has higher earnings, but lower revenue than MBIA.

Profitability

This table compares AA and MBIA’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AA	N/A	N/A	N/A
MBIA	-221.25%	N/A	-1.68%

Insider and Institutional Ownership

61.0% of MBIA shares are held by institutional investors. 10.4% of MBIA shares are held 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.

Summary

MBIA beats AA on 6 of the 8 factors compared between the two stocks.

About AA

AA plc provides roadside assistance, insurance, and driving services in the United Kingdom. It operates through two segments, Roadside and Insurance. The company offers breakdowns cover for cars, motorcycles, caravans, vans, and towing; car, motorbike, van, and caravan insurance; and loans, savings, mortgage, travel currency card, insurance, and credit card products. It also provides home, content, building, pet, and holiday home insurance products; and travel services. In addition, the company offers driving advisory services, such as child safety, fuel and environment, legal advisory, service and repair, safety, security, and driving cost and other services; car and MOT services; and financial services, such as personal loans, car loans, home improvement loans, debt consolidation loans, wedding loans, loan management, savings, credit cards, and online security services, as well as reinsurance services. It serves fleet and leasing companies. The company was founded in 1905 and is headquartered in Basingstoke, the United Kingdom.

About MBIA

MBIA Inc. provides financial guarantee insurance services to public finance markets in the United States. It operates United States (U.S.) Public Finance Insurance, and International and Structured Finance Insurance segments. The company issues financial guarantees for municipal bonds, including tax-exempt and taxable indebtedness of the U.S. political subdivisions, as well as utility districts, airports, health care institutions, higher educational facilities, housing authorities, and other similar agencies and obligations issued by private entities. It also insures the non-U.S. public finance and global structured finance, including asset-backed obligations; and sovereign-related and sub-sovereign bonds, and privately issued bonds used for the financing for utilities, toll roads, bridges, public transportation facilities, and other types of infrastructure projects, as well as offers third-party reinsurance services. MBIA Inc. was founded in 1973 and is headquartered in Purchase, New York.