Aegon (NYSE:AEG) vs. MBIA (NYSE:MBI) Critical Analysis

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

Institutional and Insider Ownership

61.0% of MBIA shares are owned by institutional investors. Comparatively, 4.3% of Aegon shares are owned by institutional investors. 12.6% of MBIA shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares MBIA and Aegon”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MBIA	$80.00 million	3.77	-$177.00 million	($3.58)	-1.66
Aegon	$10.29 billion	1.43	$1.11 billion	($0.16)	-45.97

Aegon has higher revenue and earnings than MBIA. Aegon is trading at a lower price-to-earnings ratio than MBIA, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

MBIA has a beta of 1.81, suggesting that its share price is 81% more volatile than the S&P 500. Comparatively, Aegon has a beta of 0.79, suggesting that its share price is 21% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for MBIA and Aegon, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MBIA	1	0	1	0	2.00
Aegon	0	3	3	1	2.71

MBIA presently has a consensus price target of $7.50, suggesting a potential upside of 26.58%. Given MBIA’s higher probable upside, research analysts clearly believe MBIA is more favorable than Aegon.

Profitability

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

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

Summary

Aegon beats MBIA on 8 of the 14 factors compared between the two stocks.

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.

About Aegon

Aegon Ltd. provides insurance, pensions, retirement, and asset management services in the United States, the Netherlands, the United Kingdom, and internationally. The company offers life, accident, property and casualty, and health insurance; annuities, retirement plans, mutual funds, and stable value solutions; residential mortgage and digital baking services; and retail and institutional investment management solutions and retirement savings vehicles and strategies. It offers its products under the Aegon and Transamerica brands. Aegon Ltd. was founded in 1844 and is headquartered in The Hague, the Netherlands.