American International Group (NYSE:AIG) and James River Group (NASDAQ:JRVR) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, earnings, institutional ownership, profitability, dividends, risk and analyst recommendations.
American International Group pays an annual dividend of $1.28 per share and has a dividend yield of 2.6%. James River Group pays an annual dividend of $1.20 per share and has a dividend yield of 2.8%. American International Group pays out 109.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. James River Group pays out 51.5% of its earnings in the form of a dividend. James River Group is clearly the better dividend stock, given its higher yield and lower payout ratio.
This table compares American International Group and James River Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|American International Group||3.56%||4.17%||0.51%|
|James River Group||3.69%||4.86%||1.08%|
This is a breakdown of current ratings and recommmendations for American International Group and James River Group, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|American International Group||0||4||9||0||2.69|
|James River Group||1||2||1||0||2.00|
American International Group presently has a consensus price target of $59.94, indicating a potential upside of 23.64%. James River Group has a consensus price target of $39.67, indicating a potential downside of 8.83%. Given American International Group’s stronger consensus rating and higher probable upside, analysts plainly believe American International Group is more favorable than James River Group.
Institutional & Insider Ownership
91.0% of American International Group shares are held by institutional investors. Comparatively, 96.5% of James River Group shares are held by institutional investors. 0.1% of American International Group shares are held by insiders. Comparatively, 3.5% of James River Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Earnings & Valuation
This table compares American International Group and James River Group’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|American International Group||$47.39 billion||0.89||-$6.00 million||$1.17||41.44|
|James River Group||$885.60 million||1.49||$63.83 million||$2.33||18.67|
James River Group has lower revenue, but higher earnings than American International Group. James River Group 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.
Volatility and Risk
American International Group has a beta of 1.12, meaning that its stock price is 12% more volatile than the S&P 500. Comparatively, James River Group has a beta of 0.44, meaning that its stock price is 56% less volatile than the S&P 500.
James River Group beats American International Group on 11 of the 16 factors compared between the two stocks.
About American International Group
American International Group, Inc. provides insurance products for commercial, institutional, and individual customers in North America and internationally. The company's General Insurance segment offers general liability, environmental, commercial automobile liability, workers' compensation, excess casualty, and crisis management insurance products, as well as various risk-sharing and other customized structured programs; commercial, industrial, and energy-related property insurance; and aerospace, political risk, trade credit, portfolio solutions, surety, crop, and marine insurance. It also provides professional liability insurance products for a range of businesses and risks, including directors and officer's liability, mergers and acquisitions, fidelity, employment practices, fiduciary liability, cyber risk, kidnap and ransom, and errors and omissions insurance. In addition, this segment offers personal auto and property insurance, voluntary and sponsor-paid personal accident, and supplemental health products; extended warranty insurance products; and travel insurance products. Its Life and Retirement segment offers variable annuities, fixed index and fixed annuities, and retail mutual funds; group mutual funds, fixed annuities, and variable annuities, as well as individual annuity and investment products, and financial planning and advisory services; and term life and universal life insurance. This segment also provides stable value wrap products, and structured settlement and pension risk transfer annuities; and corporate- and bank-owned life insurance and guaranteed investment contracts. This segment sells its products through independent marketing organizations, independent insurance agents, financial advisors, direct marketing, banks, wirehouses, and broker-dealers. The company's Legacy Portfolio segment offers legacy insurance products. American International Group, Inc. was founded in 1919 and is headquartered in New York, New York.
About James River Group
James River Group Holdings, Ltd., through its subsidiaries, provides specialty insurance and reinsurance services in the United States. Its Excess and Surplus Lines segment underwrites liability and property insurance on an excess and surplus commercial lines basis in all states and the District of Columbia. This segment distributes its insurance policies primarily through wholesale insurance brokers. The company's Specialty Admitted Insurance segment provides workers' compensation coverage for building trades, healthcare employees, goods and services, light manufacturing, specialty transportation, agriculture, and fronting and program business in North Carolina, Tennessee, Virginia, South Carolina, Georgia, New Jersey, Missouri, Kansas, Pennsylvania, Massachusetts, Rhode Island, Alabama, Connecticut, and Mississippi. Its Casualty Reinsurance segment offers proportional and working layer casualty reinsurance to third parties and unaffiliated insurance companies. James River Group Holdings, Ltd. was founded in 2002 and is headquartered in Pembroke, Bermuda.
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