Financial Analysis: Atlantic American (AAME) versus MetLife (MET)

Atlantic American (NASDAQ: AAME) and MetLife (NYSE:MET) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, profitability, institutional ownership, valuation, earnings, analyst recommendations and dividends.

Dividends

Atlantic American pays an annual dividend of $0.02 per share and has a dividend yield of 0.7%. MetLife pays an annual dividend of $1.68 per share and has a dividend yield of 3.5%. MetLife pays out 37.3% of its earnings in the form of a dividend. MetLife has increased its dividend for 5 consecutive years. MetLife is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Atlantic American and MetLife’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Atlantic American -0.15% -3.18% -1.03%
MetLife 6.48% 8.70% 0.68%

Analyst Ratings

This is a summary of current recommendations for Atlantic American and MetLife, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Atlantic American 0 0 0 0 N/A
MetLife 1 8 9 0 2.44

MetLife has a consensus target price of $57.13, indicating a potential upside of 19.58%. Given MetLife’s higher possible upside, analysts plainly believe MetLife is more favorable than Atlantic American.

Institutional & Insider Ownership

5.1% of Atlantic American shares are owned by institutional investors. Comparatively, 79.4% of MetLife shares are owned by institutional investors. 79.2% of Atlantic American shares are owned by insiders. Comparatively, 0.3% of MetLife shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Atlantic American and MetLife’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Atlantic American $181.11 million 0.31 $4.52 million N/A N/A
MetLife $62.09 billion 0.78 $4.01 billion $4.50 10.62

MetLife has higher revenue and earnings than Atlantic American.

Risk and Volatility

Atlantic American has a beta of 0.54, suggesting that its stock price is 46% less volatile than the S&P 500. Comparatively, MetLife has a beta of 1.24, suggesting that its stock price is 24% more volatile than the S&P 500.

Summary

MetLife beats Atlantic American on 12 of the 14 factors compared between the two stocks.

Atlantic American Company Profile

Atlantic American Corporation, through its subsidiaries, provides life and health, and property and casualty insurance products in the United States. It operates through American Southern and Bankers Fidelity segments. The company offers property and casualty insurance products, including business automobile insurance coverage for state governments, local municipalities, and other motor pools and fleets; and inland marine and general liability insurance products. It also provides surety bond coverage for school bus transportation and subdivision construction, as well as performance and payment bonds. In addition, it provides ordinary and term life insurance, medicare supplement, and other accident and health insurance products. The company markets its products through independent agents, broker-agents, and special market agents. Atlantic American Corporation was founded in 1968 and is based in Atlanta, Georgia.

MetLife Company Profile

MetLife, Inc. engages in the insurance, annuities, employee benefits, and asset management businesses. It operates through five segments: U.S.; Asia; Latin America; Europe, the Middle East and Africa; and MetLife Holdings. The company offers life, dental, group short- and long-term disability, individual disability, accidental death and dismemberment, vision, and accident and health coverages, as well as prepaid legal plans; administrative services-only arrangements to employers; and stable value products, including general and separate account guaranteed interest contracts, and private floating rate funding agreements. It also provides pension risk transfers, institutional income annuities, tort settlements, and capital markets investment products; and other products and services, such as life insurance products and funding agreements for funding postretirement benefits, as well as company, bank, or trust-owned life insurance used to finance nonqualified benefit programs for executives. In addition, the company offers automobile, homeowners', and personal excess liability, as well as small business owners' property, liability, and business interruption insurance products. Further, it provides fixed annuities and pension products; medical and credit insurance products; variable, universal, term, endowment, and whole life insurance products; variable, and fixed and indexed-linked annuities; and protection against costs of long-term health care services. MetLife, Inc. has a strategic alliance with Ernst & Young LLP. The company serves individuals, corporations and their employees, and other institutions through independent agents, property and casualty specialists, sales forces, sales teams and relationship managers, and other organizations, as well as through career agency, bancassurance, direct marketing, brokerage, and other third-party distribution and e-commerce channels. MetLife, Inc. was founded in 1863 and is headquartered in New York, New York.

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