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AIG Leads Financials as Investors Digest Q4 and Dividend

AIG on Thursday announced a new authorization to repurchase up to $1 billion in common shares, bringing its total remaining buyback authorization to $1.4 billion. The company bought back about $600 million in common shares during 2013, lowering its weighted average share count for the year by 14%.

Also on Thursday, AIG said it would raise its quarterly dividend on common shares to 12.5 cents from 10 cents.

KBW analyst Meyer Shields on Sunday reiterated his "market perform" rating for AIG, with a price target of $54.00.  "AIG trades at 71% of its current $68.62 book value per share - a discount to its specialty insurer peers, but on a metric that we think is both obvious and with limited predictive power. We think the 10.1x 2015E EPS valuation fairly balances the core units' improving earnings against the risks of persistent investment yield pressure and uncertain rate and loss reserve adequacy should loss cost inflation
accelerate," Shields wrote in a note to clients.

He estimates AIG will earn $4.25 a share this year, with EPS growing to $4.85 in 2015.

This chart shows the performance of AIG's stock against the S&P 500 (^GSPC) over the past five years:

AIG ChartAIG data by YCharts

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Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.
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AIG $58.69 0.02%
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