American International Group, Inc. (AIG) Buy or Sell Stock Guide

Last updated: Jan 24, '19

The analysis below may be 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 / a good investment?
  • What are AIG analyst opinions, recommendations, ratings?

Here are AIG stock buy reasons/signals:

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 forward dividend yield is 3.11%, higher than the industry (1.19%) and sector (1.18%) forward dividend yields.

5. AIG forward P/E ratio is 8.86, and it’s low compared to its industry peers’ P/E ratios.

6. AIG Price/Book ratio is 0.63, and it’s low compared to its industry peers’ P/B ratios.

7. AIG average analyst rating is Buy.

8. AIG average analyst price target ($57.06) is above its current price ($42.81).

Here are AIG stock sell reasons/signals:

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 quarterly revenue growth was -2.30%, lower than the industry and sector average revenue growth (4.62% and 6.48%, respectively).

5. AIG profitability is declining. The YoY profit margin change was -10.66pp.

6. AIG short share of float is 2.68%. The stock is much more frequently shorted than the average industry, sector or S&P 500 stock.

What are your thoughts on AIG?

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