AIG Stock Rises 12.1% YTD: Should Investors Hold or Fold?

Zacks2024-12-06

Shares of the major insurer American International Group, Inc. AIG have gained 12.1% in the year-to-date period, underperforming the multiline insurance industry’s growth of 24% and the S&P 500 Index’...

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AIG have gained 12.1% in the year-to-date period, underperforming the multiline insurance industry’s growth of 24% and the S&P 500 Index’...</p>\n\n<a href=\"https://finance.yahoo.com/news/aig-stock-rises-12-1-200000466.html\">Source Link</a>\n\n</div>\n","source":"yahoofinance","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>AIG Stock Rises 12.1% YTD: Should Investors Hold or Fold?</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nAIG Stock Rises 12.1% YTD: Should Investors Hold or Fold?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-12-06 04:00 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://finance.yahoo.com/news/aig-stock-rises-12-1-200000466.html><strong>Zacks</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Shares of the major insurer American International Group, Inc. AIG have gained 12.1% in the year-to-date period, underperforming the multiline insurance industry’s growth of 24% and the S&P 500 Index’...</p>\n\n<a href=\"https://finance.yahoo.com/news/aig-stock-rises-12-1-200000466.html\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":null,"symbol_name":null,"start_time":0,"source_url":"https://finance.yahoo.com/news/aig-stock-rises-12-1-200000466.html","article_id":"2489411652","we_media_id":null,"thumbnails":["https://s.yimg.com/uu/api/res/1.2/urh9kFHgpMG9FrsFlUHKyA--~B/aD0zOTE7dz02MjA7YXBwaWQ9eXRhY2h5b24-/https://media.zenfs.com/en/zacks.com/c6fad3ca7c16d98ecfc2bf948f4cf143"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2489411652","pubTimestamp":1733428800,"columns":[],"sourceInfo":{"source_id":"yahoofinance","name":"雅虎金融"},"weMediaInfo":null,"summary":"Shares of the major insurer American International Group, Inc. AIG have gained 12.1% in the year-to-date period, underperforming the multiline insurance industry’s growth of 24% and the S&P 500 Index’s rise of 27.2%. AIG stock is down 6% from its 52-week high of $80.83.Peers such as MetLife, Inc. MET and Marsh & McLennan Companies, Inc. MMC have experienced growth of 29.2% and 21.3%, respectively, during this time.From a valuation perspective, American International is trading at a premium compared to the industry average. The company's shares are currently priced at a forward 12-month price/earnings ratio of 11.57X, higher than its five-year median of 9.69X and the industry average of 9.48X.AIG’s growth is driven by several factors, including improving returns on investments, premium base and ongoing expense discipline.Rising income from fixed-maturity securities and alternative investments are boosting its investment income. In the third quarter, the metric increased 13.7% year over ","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{},"translate_title":"AIG股价年初至今上涨12.1%：投资者应该持有还是买入？","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"MMC":1,"MET":1,"AIG":1,"ISBC":1,"CRBG":1},"content_text":"Shares of the major insurer American International Group, Inc. AIG have gained 12.1% in the year-to-date period, underperforming the multiline insurance industry’s growth of 24% and the S&P 500 Index’s rise of 27.2%. AIG stock is down 6% from its 52-week high of $80.83.\nPeers such as MetLife, Inc. MET and Marsh & McLennan Companies, Inc. MMC have experienced growth of 29.2% and 21.3%, respectively, during this time.\nAIG Stock YTD Price Performance Comparison\n Image Source: Zacks Investment Research\nFrom a valuation perspective, American International is trading at a premium compared to the industry average. The company's shares are currently priced at a forward 12-month price/earnings ratio of 11.57X, higher than its five-year median of 9.69X and the industry average of 9.48X.\nIn comparison, MetLife and Marsh & McLennan are currently trading at forward 12-month P/E of 8.90X and 24.6X, respectively.\nA premium valuation often reflects strong confidence in a stock's prospects. Let’s examine AIG’s operations and fundamentals to determine whether this valuation is justified or if investors may have overly optimistic expectations about its future growth potential.\nBehind AIG’s Growth Story\nAIG’s growth is driven by several factors, including improving returns on investments, premium base and ongoing expense discipline. Rising income from fixed-maturity securities and alternative investments are boosting its investment income. In the third quarter, the metric increased 13.7% year over year to $973 million.\nThe company is streamlining its operations by shedding non-core businesses to focus on core insurance.Significant steps includedeconsolidating Corebridge Financial, Inc. CRBG and the divestment of Crop Risk Services, Validus Re and related assets. These moves aim to focus on the General Insurance unit, reduce portfolio volatility, increase cash liquidity and accelerate capital deployment.\nCourtesy of alteration in business mix, ongoing expense discipline and improved premium base, AIG's expense ratio, on a comparable basis, is expected to improve. Its AIG Next program is expected to generate sustained annual run rate savings of $500 million.\nAIG is placing a strong emphasis on returning capital to its shareholders. In 2023, the company allocated $3 billion to share repurchases and paid out $1 billion in dividends. In 2024, it continued this approach, repurchasing $4.8 billion worth of shares during the first nine months and paying $765 million in dividends. Additionally, in May 2024, AIG increased its quarterly dividend by 11%. This commitment to shareholder returns highlights its confidence in its operations and its focus on maximizing value for its investors.\nThese are likely to help the company offset the negative factors it is facing and continue its growth story in the long run.\nWhat Are the Negative Factors for AIG Stock?\nAIG's significant debt load presents a challenge to its growth prospects. As of the third quarter, the company reported long-term debt of $9.89 billion, far surpassing its cash balance of just $1.47 billion, which also decreased slightly from $1.54 billion at the end of 2023. Additionally, AIG’s net debt-to-capital ratio is notably higher than the industry average.\nMoreover, the company's ROE of 8.63% is lower than the industry average of 15.38%. This reflects its relative inefficiency in utilizing shareholders’ funds to generate profits.\nAIG’s Earnings Estimate Revision\nThe Zacks Consensus Estimate for 2024 earnings per share of $5.12 declined 1.2% in the past 60 days. The company witnessed three downward estimate revisions against one upward movement during this time.\nNevertheless, it beat earnings estimates in three of the past four quarters and missed once, the average surprise being 2.9%.\n\nAmerican International Group, Inc. Price and EPS Surprise\n  \nAmerican International Group, Inc. price-eps-surprise | American International Group, Inc. Quote\n\nShould You Stick With AIG Stock for Now?\nConsidering the positive factors discussed, AIG is certainly a stock to keep in your long-term investment portfolio. Currently, it trades below the Wall Street average price target of $84.72 per share, indicating an 11.53% upside from current levels.\nAIG’s improving business mix, growing returns on investmentsand ongoing expense disciplineposition it well for long-term growth. As such, retaining this Zacks Rank #3 (Hold) stock appears prudent. Meanwhile, new investors may consider waiting for a more attractive entry point while keeping an eye on the company’s balance sheet improvement efforts. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.\nWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report\nAmerican International Group, Inc. (AIG) : Free Stock Analysis Report\nMetLife, Inc. (MET) : Free Stock Analysis Report\nMarsh & McLennan Companies, Inc. (MMC) : Free Stock Analysis Report\nCorebridge Financial, Inc. (CRBG) : Free Stock Analysis Report\nTo read this article on Zacks.com click here.\nZacks Investment Research","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.30.0","shortVersion":"4.30.0","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2489411652"}