Reviewing Ping An Insurance Co. of China (OTCMKTS:PNGAY) and American International Group (NYSE:AIG)

Ping An Insurance Co. of China (OTCMKTS:PNGAY) and American International Group (NYSE:AIG) are both large-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, earnings, dividends, profitability, valuation and risk.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Ping An Insurance Co. of China and American International Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ping An Insurance Co. of China	0	1	0	0	2.00
American International Group	0	10	9	2	2.62

American International Group has a consensus target price of $89.81, indicating a potential upside of 13.83%. Given American International Group’s stronger consensus rating and higher possible upside, analysts clearly believe American International Group is more favorable than Ping An Insurance Co. of China.

Earnings and Valuation

This table compares Ping An Insurance Co. of China and American International Group”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ping An Insurance Co. of China	$158.77 billion	0.82	$17.61 billion	$1.83	7.78
American International Group	$27.25 billion	1.60	-$1.40 billion	$5.28	14.94

Ping An Insurance Co. of China has higher revenue and earnings than American International Group. Ping An Insurance Co. of China 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.

Insider and Institutional Ownership

0.0% of Ping An Insurance Co. of China shares are held by institutional investors. Comparatively, 90.6% of American International Group shares are held by institutional investors. 0.1% of Ping An Insurance Co. of China shares are held by insiders. Comparatively, 0.5% of American International Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Dividends

Ping An Insurance Co. of China pays an annual dividend of $0.44 per share and has a dividend yield of 3.1%. American International Group pays an annual dividend of $1.80 per share and has a dividend yield of 2.3%. Ping An Insurance Co. of China pays out 24.0% of its earnings in the form of a dividend. American International Group pays out 34.1% 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 3 consecutive years. Ping An Insurance Co. of China is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Ping An Insurance Co. of China and American International Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ping An Insurance Co. of China	10.59%	9.12%	0.92%
American International Group	11.51%	7.88%	2.04%

Risk and Volatility

Ping An Insurance Co. of China has a beta of 0.34, indicating that its stock price is 66% less volatile than the S&P 500. Comparatively, American International Group has a beta of 0.68, indicating that its stock price is 32% less volatile than the S&P 500.

Summary

American International Group beats Ping An Insurance Co. of China on 13 of the 18 factors compared between the two stocks.

About Ping An Insurance Co. of China

Ping An Insurance (Group) Company of China, Ltd. provides financial products and services for insurance, banking, asset management, and technology businesses in the People's Republic of China. The company operates through Life and Health Insurance; Property and Casualty Insurance; Banking; Asset Management; and Technology segments. Its Life and Health Insurance segment offers term, whole-life, endowment, annuity, investment-linked, universal life, and health care and medical insurance to individual and corporate customers. The company's Property and Casualty Insurance segment provides auto, non-auto, and accident and health insurance to individual and corporate customers. Its Banking segment undertakes loan and intermediary businesses with corporate and retail customers; and offers wealth management and credit card services to individual customers. The company's Asset Management segment provides trust products services, brokerage services, trading services, investment banking services, investment management, finance lease, and other asset management services. Its Technology segment offers financial and daily-life services through internet platforms, such as financial transaction information service, and health care service platforms. The company also provides annuity insurance, IT and business process outsourcing, real estate investment and management, futures brokerage, project investment, currency brokerage, property agency, fund raising and distribution, real estate development and leasing, and insurance agency services. In addition, it provides factoring, equity investment, logistics and warehousing, management consulting, e-commerce, and credit information services; and operates an expressway, as well as produces and sells consumer chemicals. The company was incorporated in 1988 and is based in Shenzhen, China.

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.