Contrasting American International Group (NYSE:AIG) & Equitable (NYSE:EQH)

Equitable (NYSE:EQH) and American International Group (NYSE:AIG) are both large-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, profitability, earnings, risk, institutional ownership and valuation.

Insider & Institutional Ownership

92.7% of Equitable shares are owned by institutional investors. Comparatively, 90.6% of American International Group shares are owned by institutional investors. 1.1% of Equitable shares are owned by company insiders. Comparatively, 0.5% of American International Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Equitable and American International Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Equitable	2	0	8	2	2.83
American International Group	0	12	8	1	2.48

Equitable presently has a consensus price target of $60.64, indicating a potential upside of 62.99%. American International Group has a consensus price target of $88.17, indicating a potential upside of 19.52%. Given Equitable’s stronger consensus rating and higher possible upside, analysts clearly believe Equitable is more favorable than American International Group.

Profitability

This table compares Equitable and American International Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Equitable	-11.83%	140.87%	0.58%
American International Group	11.56%	9.79%	2.48%

Valuation & Earnings

This table compares Equitable and American International Group”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Equitable	$11.67 billion	0.89	-$1.38 billion	($4.82)	-7.72
American International Group	$26.78 billion	1.48	$3.10 billion	$5.42	13.61

American International Group has higher revenue and earnings than Equitable. Equitable 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.

Dividends

Equitable pays an annual dividend of $1.08 per share and has a dividend yield of 2.9%. American International Group pays an annual dividend of $1.80 per share and has a dividend yield of 2.4%. Equitable pays out -22.4% of its earnings in the form of a dividend. American International Group pays out 33.2% 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. Equitable has increased its dividend for 2 consecutive years and American International Group has increased its dividend for 3 consecutive years. Equitable is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility & Risk

Equitable has a beta of 1.12, suggesting that its stock price is 12% more volatile than the S&P 500. Comparatively, American International Group has a beta of 0.58, suggesting that its stock price is 42% less volatile than the S&P 500.

Summary

Equitable beats American International Group on 9 of the 17 factors compared between the two stocks.

About Equitable

Equitable Holdings, Inc., together with its consolidated subsidiaries, operates as a diversified financial services company worldwide. The company operates through six segments: Individual Retirement, Group Retirement, Investment Management and Research, Protection Solutions, Wealth Management, and Legacy. The Individual Retirement segment offers a suite of variable annuity products primarily to affluent and high net worth individuals. The Group Retirement segment provides tax-deferred investment and retirement services or products to plans sponsored by educational entities, municipalities, and not-for-profit entities, as well as small and medium-sized businesses. The Investment Management and Research segment offers diversified investment management, research, and related services to various clients through institutional. The Protection Solutions segment provides life insurance products, such as VUL insurance and IUL insurance, term life, and employee benefits business, such as dental, vision, life, as well as short- and long-term disability insurance products to small and medium-sized businesses. The Wealth Management segment offers discretionary and non-discretionary investment advisory accounts, financial planning and advice, life insurance, and annuity products. The Legacy segment consists of the capital intensive fixed-rate GMxB business that includes ROP death benefits. The company was formerly known as AXA Equitable Holdings, Inc. and changed its name to Equitable Holdings, Inc. in January 2020. Equitable Holdings, Inc. was founded in 1859 and is based in New York, 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.