Rating Change #6
AEGON NV (AEG) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.
Highlights from the ratings report include:
- AEG's revenue growth has slightly outpaced the industry average of 13.1%. Since the same quarter one year prior, revenues rose by 17.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Net operating cash flow has significantly increased by 120.99% to $529.48 million when compared to the same quarter last year. In addition, AEGON NV has also vastly surpassed the industry average cash flow growth rate of 32.76%.
- Despite currently having a low debt-to-equity ratio of 0.52, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Insurance industry and the overall market on the basis of return on equity, AEGON NV underperformed against that of the industry average and is significantly less than that of the S&P 500.
- The gross profit margin for AEGON NV is currently extremely low, coming in at 2.80%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.40% trails that of the industry average.
AEGON N.V. provides life insurance, pension, and asset management products and services primarily in the Americas, Europe, and Asia. The company has a P/E ratio of 2.2, below the S&P 500 P/E ratio of 17.7. AEGON has a market cap of $8.61 billion and is part of the financial sector and insurance industry. Shares are up 9.2% year to date as of the close of trading on Wednesday.You can view the full AEGON Ratings Report or get investment ideas from our investment research center.
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