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

Insider & Institutional Ownership

93.4% 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 large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

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

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

Dividends

American Equity Investment Life Holding pays an annual dividend of $0.24 per share and has a dividend yield of 0.8%. 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.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for American Equity Investment Life Holding and The Phoenix Companies, as reported by MarketBeat.com.

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

American Equity Investment Life Holding currently has a consensus price target of $24.43, indicating a potential downside of 13.53%. Given American Equity Investment Life Holding’s higher probable upside, research analysts plainly believe American Equity Investment Life Holding is more favorable than The Phoenix Companies.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
American Equity Investment Life Holding $3.00 billion 0.84 $343.94 million $2.16 13.08
The Phoenix Companies N/A N/A N/A N/A N/A

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

Summary

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

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.

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.

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