The Phoenix Companies (NYSE: PNX) and American Equity Investment Life Holding (NYSE:AEL) are both financials companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, profitability, dividends, valuation, analyst recommendations, risk and earnings.

Institutional and Insider Ownership

93.8% of American Equity Investment Life Holding shares are held by institutional investors. 4.1% of American Equity Investment Life Holding 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.

Dividends

American Equity Investment Life Holding pays an annual dividend of $0.24 per share and has a dividend yield of 0.9%. The Phoenix Companies does not pay a dividend. American Equity Investment Life Holding pays out 11.1% of its earnings in the form of a dividend. The Phoenix Companies has raised its dividend for 4 consecutive years.

Valuation & Earnings

This table compares The Phoenix Companies and American Equity Investment Life Holding’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
The Phoenix Companies N/A N/A N/A N/A N/A
American Equity Investment Life Holding $3.00 billion 0.84 $343.94 million $2.16 13.07

American Equity Investment Life Holding has higher revenue and earnings than The Phoenix Companies.

Analyst Ratings

This is a breakdown of current recommendations and price targets for The Phoenix Companies and American Equity Investment Life Holding, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
The Phoenix Companies 0 0 0 0 N/A
American Equity Investment Life Holding 0 5 2 0 2.29

American Equity Investment Life Holding has a consensus target price of $24.14, indicating a potential downside of 14.48%. Given American Equity Investment Life Holding’s higher possible upside, analysts plainly believe American Equity Investment Life Holding is more favorable than The Phoenix Companies.

Profitability

This table compares The Phoenix Companies and American Equity Investment Life Holding’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
The Phoenix Companies -10.34% -121.92% -0.83%
American Equity Investment Life Holding 6.48% 6.84% 0.30%

Summary

American Equity Investment Life Holding beats The Phoenix Companies on 9 of the 11 factors compared between the two stocks.

The Phoenix Companies Company Profile

The Phoenix Companies, Inc. (Phoenix) is a holding company. The Company’s operating subsidiaries provide life insurance and annuity products through independent agents and financial advisors. Phoenix operates through two segments: Life and Annuity, and Saybrus. The Life and Annuity segment includes individual life insurance and annuity products, including its closed block. The Saybrus segment provides dedicated life insurance and other consulting services to financial advisors in partner companies, as well as support for sales of Phoenix’s product line through independent distribution organizations. Its Annuities products include Fixed Indexed Annuities, Fixed Annuities, Single Premium Immediate Annuities and Variable Annuities. Its Life Insurance products include Whole Life, Universal Life, Indexed Universal Life, Variable Universal Life and Term. Its target markets consist of middle market, and mass affluent families and individuals planning for or living in retirement.

American Equity Investment Life Holding Company Profile

American Equity Investment Life Holding Company is engaged in the development and sale of fixed index and fixed rate annuity products. The Company issues fixed annuity and life insurance products through its life insurance subsidiaries, American Equity Investment Life Insurance Company, American Equity Investment Life Insurance Company of New York and Eagle Life Insurance Company. Its target market includes the group of individuals aged 45 to 75 seeking to accumulate tax-deferred savings or create guaranteed lifetime income. The Company distributes through a range of distribution channels, including independent agents, broker/dealers, banks and registered investment advisors. Its product types include fixed index annuities, annual reset fixed rate annuities, multi-year fixed rate annuities and single premium immediate annuities. Its life insurance products include traditional ordinary and term, universal life and other interest-sensitive life insurance products.

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