American International Group, Inc. (AIG) Buy or Sell Stock Guide
Are you looking for the analysis of American International Group, Inc. (AIG) stock? Are you wondering what the bulls and the bears say about it?
If so, you came to the right place. In this stock guide, we will share with you 9 reasons to buy and 7 reasons to sell AIG stock. You’ll get a perspective on what the bulls and the bears say about it.
The analysis below may be also helpful to you if you have any of the following questions about AIG stock:
- Is AIG a buy or a sell?
- Should I sell or hold AIG stock today?
- Is AIG a good buy / investment?
- What are AIG analyst opinions, recommendations and ratings?
Let’s start with the bull case. Here are the reasons to buy AIG stock:
1. The aftermath of AIG's issues during the financial crisis occupied much of management's attention for quite some time. With these issues largely resolved, management is now focused on the company's operations, and there could be ample scope for improvement.
2. Through its life insurance operations, AIG would benefit from a higher-interest-rate environment.
3. The current focus on risk-adjusted returns sets a proper course for the company, and just increasing profitability to the level of its peers would represent a material improvement.
4. AIG profitability is improving. The YoY profit margin change was 12.27percentage points. See AIG profitability chart.
5. AIG forward dividend yield is 2.97%, higher than the industry (0.87%) and sector (0.91%) forward dividend yields. See AIG forward dividend chart.
6. AIG forward P/E ratio is 9.36, and it’s low compared to its industry peers’ P/E ratios. See AIG forward P/E ratio chart.
7. AIG Price/Book ratio is 0.72, and it’s low compared to its industry peers’ P/B ratios. See AIG forward Price/Book ratio chart.
8. AIG PEG ratio (P/E adjusted for growth) is 0.21, and it’s low compared to its industry peers’ PEG ratios. See AIG PEG chart.
9. AIG average analyst rating is Buy. See AIG analyst rating chart.
Now that you understand the bull case, let’s look at the reasons to sell AIG stock (i.e., the bear case):
1. AIG has a history of underreserving for claims, making it difficult to trust that current reserves are adequate.
2. AIG has yet to prove that its existing franchise can earn adequate returns.
3. As a diversified player in a industry that is not particularly moaty, AIG will always be dealing with issues in some part of its business.
4. AIG stock price ($51.64) is at the 52-week high. Perhaps now is a good time to sell? See AIG price chart.
5. AIG quarterly revenue growth was 0.60%, lower than the industry and sector average revenue growth (2.31% and 5.69%, respectively). See AIG revenue growth chart.
6. AIG average analyst price target ($50.44) is below its current price ($51.64). See AIG price target chart.
7. AIG short interest (days to cover the shorts) ratio is 4.41. The stock garners more short interest than the average industry, sector or S&P 500 stock. See AIG short interest ratio chart.
Now let's look at the key statistics for AIG:
|Average Price Target / Upside||$50.44 / -4.42%|
|Average Analyst Rating||Buy|
|Industry||Insurance - Diversified|
|Number of Employees||49,600|
|Forward P/E Ratio||10.13|
|YoY Quarterly Revenue Growth||6.4%|
What are your thoughts on AIG?
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