NEW YORK (
) has been reiterated by TheStreet Ratings as a hold with a ratings score of C. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income and revenue growth. However, as a counter to these strengths, we also find weaknesses including poor profit margins and feeble growth in the company's earnings per share.
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Highlights from the ratings report include:
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Insurance industry. The net income increased by 147.3% when compared to the same quarter one year prior, rising from $1,297.00 million to $3,208.00 million.
- AIG's debt-to-equity ratio of 0.75 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further.
- AMERICAN INTERNATIONAL GROUP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, AMERICAN INTERNATIONAL GROUP reported lower earnings of $8.00 versus $14.47 in the prior year. For the next year, the market is expecting a contraction of 53.9% in earnings ($3.69 versus $8.00).
- The gross profit margin for AMERICAN INTERNATIONAL GROUP is currently lower than what is desirable, coming in at 33.00%. Regardless of AIG's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, AIG's net profit margin of 17.20% compares favorably to the industry average.
American International Group, Inc. engages in the provision of insurance products and services for the commercial, institutional, and individual customers in the United States and internationally. The company operates in three segments: Chartis, SunAmerica Financial Group, and Aircraft Leasing. The company has a P/E ratio of 2.7, equal to the average insurance industry P/E ratioand below the S&P 500 P/E ratio of 17.7. American International Group has a market cap of $55.69 billion and is part of the
industry. Shares are up 35.5% year to date as of the close of trading on Friday.
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--Written by a member of TheStreet Ratings Staff.
TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.