American Equity Investment Life (AEL) vs. Its Peers Financial Analysis

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

Earnings and 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 9.09
American Equity Investment Life Competitors $22.05 billion $1.25 billion 15.76

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.

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 8.49% 11.22% 0.50%
American Equity Investment Life Competitors 4.58% 4.99% 0.82%

Insider and Institutional Ownership

93.0% of American Equity Investment Life shares are owned by institutional investors. Comparatively, 51.1% of shares of all “Life insurance” companies are owned by institutional investors. 1.9% of American Equity Investment Life shares are owned by company insiders. Comparatively, 17.3% of shares of all “Life insurance” companies are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Dividends

American Equity Investment Life pays an annual dividend of $0.26 per share and has a dividend yield of 0.9%. 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 2.2% and pay out 29.4% of their earnings in the form of a dividend. American Equity Investment Life has raised its dividend for 5 consecutive years.

Risk and Volatility

American Equity Investment Life has a beta of 2.45, indicating that its share 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 share price is 6% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for American Equity Investment Life and its competitors, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American Equity Investment Life 0 5 2 0 2.29
American Equity Investment Life Competitors 326 1164 1540 83 2.44

American Equity Investment Life presently has a consensus price target of $30.86, indicating a potential upside of 7.40%. As a group, “Life insurance” companies have a potential upside of 10.02%. Given American Equity Investment Life’s competitors stronger consensus rating and higher probable upside, analysts clearly believe American Equity Investment Life has less favorable growth aspects than its competitors.

Summary

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

About American Equity Investment Life

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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