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Here's Why You Should Add AIG Stock to Your Portfolio Now
ZACKS· 2025-09-15 17:31
Core Insights - American International Group, Inc. (AIG) is a global insurance company providing various financial services and has outperformed the industry average with an 8.4% increase year-to-date compared to 7.1% [1] Company Overview - AIG is headquartered in New York with a market capitalization of $43.4 billion and operates in three segments: North America Commercial, International Commercial, and Global Personal [2] - The company's forward P/E ratio stands at 10.73X, higher than the industry average of 9X, indicating growing investor confidence [2] - AIG currently holds a Zacks Rank 2 (Buy) due to solid growth prospects [2] Earnings Estimates - The Zacks Consensus Estimate for AIG's 2025 earnings is $6.34 per share, reflecting a 28.1% year-over-year increase [3] - Revenue estimates for 2025 are pegged at $27.6 billion, with AIG beating earnings estimates in the past four quarters, averaging a surprise of 9.5% [3] Growth Drivers - AIG's revenue growth is driven by increased net premium written (NPW), high retention rates, and new business generation [4] - NPW in the North America Commercial segment rose by 6.7% year-over-year, while the International Commercial segment saw a 3.1% increase in the first half of 2025 [4] - Tata AIG, a high-growth business, recorded a compounded annual growth rate of 20% from 2020 to 2025, with expectations to maintain this growth through 2030 [5] Strategic Initiatives - AIG plans to launch underwriter assistance for Lexington Middle Market and Property & Casualty businesses in Q3 2025, with a broader rollout in 2026 [6] - The company is scaling Gen AI across underwriting and developing AIG claims assistance [6] Financial Performance - AIG's expense ratio is improving due to changes in business mix, expense discipline, and an enhanced premium base, leading to operational efficiency [7] - Total benefits, losses, and expenses decreased by 2.4% year-over-year in the first half of 2025, attributed to lower general operating and other expenses [7] Shareholder Value - AIG has demonstrated robust cash generation, rewarding shareholders with $4 billion in share buybacks and $488 million in dividends in the first half of 2025 [8] - The company repurchased shares worth $467 million from July 1 to August 1, 2025, with a total debt to capital ratio of 18.2%, below the industry average of 34.2% [8] Challenges - AIG faces a deteriorating combined ratio across its business lines, with year-over-year deterioration of 70 bps, 100 bps, and 430 bps in North America Commercial, International Commercial, and Global Personal segments, respectively [11] - Catastrophe losses have impacted underwriting margins, with losses of $1.1 billion in 2023, increasing by 9.4% in 2024 and 59.4% in the first half of 2025 [12] - AIG's return on equity (ROE) stands at 7.9%, lower than the industry average of 14.8%, indicating relative inefficiency in utilizing shareholder funds [12]
Here's Why American International Group (AIG) is a Strong Momentum Stock
ZACKS· 2025-08-22 14:50
Core Insights - Zacks Premium offers various tools for investors to enhance their stock market strategies, including daily updates, research reports, and stock screens [1][2]. Zacks Style Scores - Zacks Style Scores are indicators that rate stocks based on value, growth, and momentum methodologies, helping investors identify stocks likely to outperform the market in the short term [2][3]. - Stocks are rated from A to F, with A indicating the highest potential for outperformance [3]. Value Score - The Value Style Score focuses on identifying undervalued stocks using financial ratios such as P/E, PEG, and Price/Sales [3]. Growth Score - The Growth Style Score emphasizes a company's financial health and future growth potential, analyzing projected and historical earnings, sales, and cash flow [4]. Momentum Score - The Momentum Style Score is designed for traders looking to capitalize on price trends, utilizing factors like recent price changes and earnings estimate shifts [5]. VGM Score - The VGM Score combines Value, Growth, and Momentum scores, providing a comprehensive rating to identify stocks with the best overall potential [6]. Zacks Rank - The Zacks Rank is a proprietary model that uses earnings estimate revisions to guide investors, with 1 (Strong Buy) stocks historically yielding an average annual return of +23.75% since 1988, significantly outperforming the S&P 500 [7][8]. - Investors are encouraged to select stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B for optimal success [9]. Company Spotlight: American International Group (AIG) - AIG is a prominent global insurance organization offering a range of services, including property casualty insurance and retirement solutions, operating in over 80 countries [11]. - Currently rated 3 (Hold) by Zacks, AIG has a VGM Score of B and a Momentum Style Score of B, with shares increasing by 4.2% in the past month [11][12]. - Recent upward revisions in earnings estimates for fiscal 2025 have led to a consensus estimate increase of $0.07 to $6.33 per share, with an average earnings surprise of +9.5% [12].
CNO Financial Reports 8 Percent Q2 Gain
The Motley Fool· 2025-07-29 01:09
Core Viewpoint - CNO Financial Group reported strong second quarter results for 2025, with revenue and non-GAAP earnings per share exceeding analyst expectations, despite declines in net income compared to the previous year [1][5][7] Financial Performance - GAAP revenue reached $1,151.5 million, significantly higher than the estimated $747.81 million, marking an 8.0% increase year-over-year from $1,066.2 million in Q2 2024 [2][5] - Non-GAAP earnings per share were $0.87, slightly above the expected $0.86, but down 17.1% from $1.05 in Q2 2024 [2][7] - GAAP net income decreased by 21.1% compared to Q2 2024, while non-GAAP net operating income also fell [7][8] Business Overview - CNO Financial Group focuses on providing life and health insurance products primarily to middle-income Americans, operating through its Consumer and Worksite Divisions [3] - The company utilizes a mix of exclusive and independent agents along with direct marketing to distribute its products [3] Key Success Factors - The effectiveness of the agent and distribution strategy, prudent investment management, and product innovation are critical for the company's success [4] - The company is focusing on agent recruitment, sales growth, and the implementation of digital processes [4] Premium Growth - New annualized premiums increased by 17%, driven by a 22% rise in new life insurance premiums and an 11% increase in new health insurance premiums compared to Q2 2024 [6] - Both Consumer and Worksite divisions reported double-digit gains in new annualized premiums, with a notable increase in digital sales channels [6] Investment and Capital Management - Book value per share rose to $25.92, up 13.7% from $22.80 a year earlier, supported by a share buyback of 2.6 million shares totaling $100.0 million [9] - The company's statutory risk-based capital (RBC) ratio was 378%, indicating strong financial stability [9] Product Innovation - The company continues to innovate with new products, including indexed annuities with lifetime income guarantees and enhanced worksite offerings [10] - Technological advancements, such as accelerated underwriting for simplified life insurance, have contributed to operational improvements [10] Outlook - Management reaffirmed its fiscal 2025 outlook, aiming to improve operating return on equity by 150 basis points through 2027 [12] - The company anticipates further profitability growth through balanced business expansion and disciplined expense management [12]