American International Group (NYSE:AIG – Get Free Report) and Old Republic International (NYSE:ORI – Get Free Report) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their profitability, institutional ownership, valuation, risk, analyst recommendations, earnings and dividends.
Valuation and Earnings
This table compares American International Group and Old Republic International”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| American International Group | $27.27 billion | 1.69 | -$1.40 billion | ($2.66) | -30.12 |
| Old Republic International | $8.23 billion | 1.08 | $852.80 million | $2.46 | 14.57 |
Profitability
This table compares American International Group and Old Republic International’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| American International Group | -7.05% | 7.13% | 1.87% |
| Old Republic International | 10.31% | 20.95% | 4.45% |
Dividends
American International Group pays an annual dividend of $1.80 per share and has a dividend yield of 2.2%. Old Republic International pays an annual dividend of $1.16 per share and has a dividend yield of 3.2%. American International Group pays out -67.7% of its earnings in the form of a dividend. Old Republic International pays out 47.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. American International Group has raised its dividend for 3 consecutive years and Old Republic International has raised its dividend for 45 consecutive years. Old Republic International is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Analyst Recommendations
This is a breakdown of recent recommendations for American International Group and Old Republic International, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| American International Group | 0 | 8 | 8 | 1 | 2.59 |
| Old Republic International | 0 | 0 | 2 | 0 | 3.00 |
American International Group presently has a consensus target price of $88.19, suggesting a potential upside of 10.07%. Old Republic International has a consensus target price of $41.50, suggesting a potential upside of 15.80%. Given Old Republic International’s stronger consensus rating and higher possible upside, analysts plainly believe Old Republic International is more favorable than American International Group.
Insider & Institutional Ownership
90.6% of American International Group shares are owned by institutional investors. Comparatively, 70.9% of Old Republic International shares are owned by institutional investors. 0.5% of American International Group shares are owned by insiders. Comparatively, 1.1% of Old Republic International shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Volatility & Risk
American International Group has a beta of 0.63, meaning that its share price is 37% less volatile than the S&P 500. Comparatively, Old Republic International has a beta of 0.73, meaning that its share price is 27% less volatile than the S&P 500.
Summary
Old Republic International beats American International Group on 12 of the 18 factors compared between the two stocks.
About American International Group
American International Group, Inc. offers insurance products for commercial, institutional, and individual customers in North America and internationally. It operates through three segments: General Insurance, Life and Retirement, and Other Operations. The General Insurance segment provides commercial and industrial property insurance, including business interruption and package insurance that cover exposure to made and natural disasters; general liability, environmental, commercial automobile liability, workers’ compensation, excess casualty, and crisis management insurance products; and professional liability insurance. This segment offers marine, energy-related property insurance, aviation, political risk, trade credit, trade finance, and portfolio solutions, as well as operates reinsurance business; voluntary and sponsor-paid personal accident, and supplemental health products; and personal auto and personal property insurance. Its Life and Retirement segment offers individual retirement products, including variable, fixed index, and fixed annuities, as well as retail mutual funds; group retirement products comprising record-keeping, plan administrative and compliance services, financial planning, and advisory solutions; life insurance, including term and universal life insurance; and institutional markets products, which includes wrap products, structured settlement, pension risk transfer annuities, corporate and bank-owned life insurance, high net worth, and guaranteed investment contract products. It distributes its products through a network of brokers, agents, advisors, banks, and other distributors. The company was founded in 1919 and is headquartered in New York, New York.
About Old Republic International
Old Republic International Corporation, through its subsidiaries, engages in the insurance underwriting and related services business primarily in the United States and Canada. It operates through three segments: General Insurance, Title Insurance, and Republic Financial Indemnity Group Run-off Business. The General Insurance segment offers aviation, commercial auto, commercial multi-peril, commercial property, general liability, home and auto warranty, inland marine, travel accident, and workers' compensation insurance products; and financial indemnity products for specialty coverages, including errors and omissions, fidelity, directors and officers, and surety. This segment provides its insurance products to businesses, state and local government, and other institutions in transportation, commercial construction, healthcare, education, retail and wholesale trade, forest products, energy, general manufacturing, and financial services industries. The Title Insurance segment offers lenders' and owners' policies to real estate purchasers and investors based upon searches of the public records. This segment also provides escrow closing and construction disbursement services; and real estate information products, national default management services, and various other services pertaining to real estate transfers and loan transactions. The Republic Financial Indemnity Group Run-off Business segment offers private mortgage insurance coverage that protects mortgage lenders and investors from default related losses on residential mortgage loans made primarily to homebuyers. Old Republic International Corporation was founded in 1923 and is based in Chicago, Illinois.
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