MBIA (NYSE:MBI – Get Free Report) and American International Group (NYSE:AIG – Get Free Report) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, analyst recommendations, earnings, risk, valuation, profitability and institutional ownership.
Volatility and Risk
MBIA has a beta of 1.81, indicating that its stock price is 81% more volatile than the S&P 500. Comparatively, American International Group has a beta of 0.59, indicating that its stock price is 41% less volatile than the S&P 500.
Earnings and Valuation
This table compares MBIA and American International Group”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| MBIA | $80.00 million | 3.80 | -$177.00 million | ($3.58) | -1.67 |
| American International Group | $26.78 billion | 1.57 | $3.10 billion | $5.42 | 14.48 |
American International Group has higher revenue and earnings than MBIA. MBIA is trading at a lower price-to-earnings ratio than American International Group, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
61.0% of MBIA shares are owned by institutional investors. Comparatively, 90.6% of American International Group shares are owned by institutional investors. 11.3% of MBIA shares are owned by insiders. Comparatively, 0.6% of American International Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Analyst Recommendations
This is a summary of current recommendations for MBIA and American International Group, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| MBIA | 1 | 0 | 1 | 0 | 2.00 |
| American International Group | 0 | 12 | 7 | 1 | 2.45 |
MBIA presently has a consensus price target of $7.50, suggesting a potential upside of 25.59%. American International Group has a consensus price target of $86.76, suggesting a potential upside of 10.55%. Given MBIA’s higher possible upside, analysts clearly believe MBIA is more favorable than American International Group.
Profitability
This table compares MBIA and American International Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| MBIA | -221.25% | N/A | -1.68% |
| American International Group | 11.56% | 9.79% | 2.48% |
Summary
American International Group beats MBIA on 11 of the 15 factors compared between the two stocks.
About MBIA
MBIA Inc. provides financial guarantee insurance services to public finance markets in the United States. It operates United States (U.S.) Public Finance Insurance, and International and Structured Finance Insurance segments. The company issues financial guarantees for municipal bonds, including tax-exempt and taxable indebtedness of the U.S. political subdivisions, as well as utility districts, airports, health care institutions, higher educational facilities, housing authorities, and other similar agencies and obligations issued by private entities. It also insures the non-U.S. public finance and global structured finance, including asset-backed obligations; and sovereign-related and sub-sovereign bonds, and privately issued bonds used for the financing for utilities, toll roads, bridges, public transportation facilities, and other types of infrastructure projects, as well as offers third-party reinsurance services. MBIA Inc. was founded in 1973 and is headquartered in Purchase, New York.
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.
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