Heritage Insurance (NYSE:HRTG – Get Free Report) and American International Group (NYSE:AIG – Get Free Report) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, risk, earnings and valuation.
Profitability
This table compares Heritage Insurance and American International Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Heritage Insurance | 6.07% | 25.96% | 2.01% |
| American International Group | 9.98% | 10.54% | 0.93% |
Analyst Recommendations
This is a breakdown of recent ratings and price targets for Heritage Insurance and American International Group, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Heritage Insurance | 0 | 2 | 1 | 0 | 2.33 |
| American International Group | 0 | 7 | 9 | 0 | 2.56 |
Valuation and Earnings
This table compares Heritage Insurance and American International Group’s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Heritage Insurance | $749.88 million | 0.34 | $45.31 million | $1.64 | 5.07 |
| American International Group | $46.80 billion | 1.13 | $3.64 billion | $6.70 | 11.92 |
American International Group has higher revenue and earnings than Heritage Insurance. Heritage Insurance 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.
Risk and Volatility
Heritage Insurance has a beta of 0.92, meaning that its stock price is 8% less volatile than the S&P 500. Comparatively, American International Group has a beta of 1.02, meaning that its stock price is 2% more volatile than the S&P 500.
Dividends
Heritage Insurance pays an annual dividend of $0.24 per share and has a dividend yield of 2.9%. American International Group pays an annual dividend of $1.44 per share and has a dividend yield of 1.8%. Heritage Insurance pays out 14.6% of its earnings in the form of a dividend. American International Group pays out 21.5% 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. American International Group has increased its dividend for 1 consecutive years. Heritage Insurance is clearly the better dividend stock, given its higher yield and lower payout ratio.
Institutional and Insider Ownership
59.0% of Heritage Insurance shares are owned by institutional investors. Comparatively, 90.6% of American International Group shares are owned by institutional investors. 11.9% of Heritage Insurance shares are owned by company insiders. Comparatively, 0.6% 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.
Summary
American International Group beats Heritage Insurance on 11 of the 17 factors compared between the two stocks.
About Heritage Insurance
Heritage Insurance Holdings, Inc., through its subsidiaries, provides personal and commercial residential insurance products. The company offers personal residential insurance in Alabama, California, Connecticut, Delaware, Florida, Georgia, Hawaii, Maryland, Massachusetts, Mississippi, New Jersey, New York, North Carolina, Rhode Island, South Carolina, and Virginia; commercial residential insurance for properties in Florida, New Jersey, and New York; and licensed in the state of Pennsylvania, as well as personal residential and wind-only property insurance. It also provides restoration, emergency, and recovery services; property management, and reinsurance services; homeowners insurance products, including single-family, homeowners or duplex, and condominium owners; and dwelling fire insurance policies. In addition, the company provides personal line policies through a network of retail independent agents, wholesale agents, and a partnership with a direct agency, as well as distribute indirectly to retail locations through wholesale agency relationships. Further, it offers personal and commercial insurance policies through a network of independent agencies. The company was founded in 2012 and is headquartered in Tampa, Florida.
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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