Stock of the Day

June 23, 2023

American International Group (AIG)

$85.31
+$0.30 (+0.4%)
Market Cap: $49.17B

About American International Group

American International Group, Inc. offers insurance products for commercial, institutional, and individual customers in North America and internationally. It operates through three segments: General Insurance, Life and Retirement, and Other Operations. The General Insurance segment provides commercial and industrial property insurance, including business interruption and package insurance that cover exposure to made and natural disasters; general liability, environmental, commercial automobile liability, workers' compensation, excess casualty, and crisis management insurance products; and professional liability insurance. This segment offers marine, energy-related property insurance, aviation, political risk, trade credit, trade finance, and portfolio solutions, as well as operates reinsurance business; voluntary and sponsor-paid personal accident, and supplemental health products; and personal auto and personal property insurance. Its Life and Retirement segment offers individual retirement products, including variable, fixed index, and fixed annuities, as well as retail mutual funds; group retirement products comprising record-keeping, plan administrative and compliance services, financial planning, and advisory solutions; life insurance, including term and universal life insurance; and institutional markets products, which includes wrap products, structured settlement, pension risk transfer annuities, corporate and bank-owned life insurance, high net worth, and guaranteed investment contract products. It distributes its products through a network of brokers, agents, advisors, banks, and other distributors. The company was founded in 1919 and is headquartered in New York, New York.

American International Group Bull Case

Here are some ways that investors could benefit from investing in American International Group, Inc.:

  • The company recently reported earnings per share of $1.17, exceeding analysts' expectations, which indicates strong financial performance and potential for growth.
  • American International Group, Inc. has increased its quarterly dividend to $0.45 per share, reflecting a commitment to returning value to shareholders and suggesting confidence in future earnings.
  • With a positive return on equity of 8.01%, the company demonstrates effective management of shareholder equity, which can be a sign of a well-run business.
  • The current stock price is around $83, which may present a buying opportunity for investors looking for value in the insurance sector.
  • Analysts have a consensus rating of "Moderate Buy" for the stock, with a target price averaging around $88.12, indicating potential upside for investors.

American International Group Bear Case

Investors should be bearish about investing in American International Group, Inc. for these reasons:

  • The company reported a negative net margin of 4.25%, which suggests that it is currently spending more than it earns, raising concerns about profitability.
  • Year-over-year earnings per share decreased from $1.25 to $1.17, indicating a decline in profitability compared to the same quarter last year.
  • The dividend payout ratio is currently negative, which may raise concerns about the sustainability of dividend payments in the future.
  • Despite recent upgrades from analysts, the stock has seen fluctuations, and some analysts have lowered their target prices, which could indicate uncertainty in the market.
  • Insider selling activity, such as the recent sale of shares by an executive vice president, may signal a lack of confidence in the company's short-term prospects.
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