Editor's Note: 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.
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 notable return on equity. However, as a counter to these strengths, we also find weaknesses including poor profit margins, weak operating cash flow and feeble growth in the company's earnings per share.
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Highlights from the ratings report include:
- Powered by its strong earnings growth of 29.12% and other important driving factors, this stock has surged by 47.29% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- 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 27.0% when compared to the same quarter one year prior, rising from $1,836.00 million to $2,332.00 million.
- AIG, with its decline in revenue, slightly underperformed the industry average of 0.7%. Since the same quarter one year prior, revenues slightly dropped by 0.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- Net operating cash flow has declined marginally to $1,743.00 million or 7.33% when compared to the same quarter last year. Despite a decrease in cash flow AMERICAN INTERNATIONAL GROUP is still fairing well by exceeding its industry average cash flow growth rate of -25.02%.
- The gross profit margin for AMERICAN INTERNATIONAL GROUP is rather low; currently it is at 17.20%. It has decreased from the same quarter the previous year. Regardless of the weak results of the gross profit margin, the net profit margin of 13.80% is above that of 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 2.9, above the average insurance industry P/E ratio of 2.7 and below the S&P 500 P/E ratio of 17.7. American International Group has a market cap of $56.19 billion and is part of the
industry. Shares are up 48.6% year to date as of the close of trading on Friday.
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--Written by a member of TheStreet Ratings Staff.