American Equity Investment Life Holding Com Stock Upgraded (AEL)

NEW YORK ( TheStreet) -- American Equity Investment Life Holding Com (NYSE: AEL) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, attractive valuation levels, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • AMERICAN EQTY INVT LIFE HLDG reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, AMERICAN EQTY INVT LIFE HLDG increased its bottom line by earning $1.33 versus $0.69 in the prior year. This year, the market expects an improvement in earnings ($2.00 versus $1.33).
  • 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 449.9% when compared to the same quarter one year prior, rising from $9.04 million to $49.70 million.
  • AEL, with its decline in revenue, underperformed when compared the industry average of 5.0%. Since the same quarter one year prior, revenues fell by 12.7%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • Despite currently having a low debt-to-equity ratio of 0.40, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further.
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American Equity Investment Life Holding Company, through its subsidiaries, underwrites fixed annuity and life insurance products in the United States and the District of Columbia. The company has a P/E ratio of six, below the average insurance industry P/E ratio of 17.2 and below the S&P 500 P/E ratio of 17.7. American Equity Investment Life Holding Com has a market cap of $721.9 million and is part of the financial sector and insurance industry. Shares are up 22.4% year to date as of the close of trading on Tuesday.

You can view the full American Equity Investment Life Holding Com Ratings Report or get investment ideas from our investment research center.
-- Written by a member of TheStreet RatingsStaff
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