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 revenue growth, solid stock price performance and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow, poor profit margins and feeble growth in the company's earnings per share.
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Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 21.6%. Since the same quarter one year prior, revenues rose by 46.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 156.78% and other important driving factors, this stock has surged by 35.12% 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.
- AIG's debt-to-equity ratio of 0.73 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.
- The gross profit margin for AMERICAN INTERNATIONAL GROUP is rather low; currently it is at 23.20%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, AIG's net profit margin of 10.50% compares favorably to the industry average.
- Net operating cash flow has decreased to $1,207.00 million or 49.58% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
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. American International Group has a market cap of $46.95 billion and is part of the financial sector and insurance industry. The company has a P/E ratio of 2.1, below the S&P 500 P/E ratio of 17.7. Shares are up 37.1% year to date as of the close of trading on Monday.
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--Written by a member of TheStreet Ratings Staff.
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