We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why You Should Add American Equity (AEL) to Your Portfolio
Read MoreHide Full Article
American Equity Investment Life Holding Company is well-poised for growth, riding on demographic change, product refreshes and solid capital position.
The Zacks Consensus Estimate for 2020 earnings has moved up 1.2% in the past 30 days, reflecting analysts’ optimism. Return on equity of 15.8% in the first quarter of 2020 was better than the industry average of 11.8%, reflecting the company’s efficiency in utilizing shareholders’ fund.
The company’s target market includes individuals in the age group of 45-75, seeking to accumulate tax-deferred savings or create guaranteed lifetime income. Per the U.S. Census Bureau, Americans aged 65 and older will represent 20% of the total population by 2030 from 13% in 2010. Thus, being a premier fixed index annuity producer in the independent agent channel, American Equity is poised to benefit from this demography.
The company also remains focused on capitalizing on increasing popularity of index products.
To retain sustainability and adapt to changes, this Zacks Rank #2 (Buy) life insurer has been undergoing product re-fresh. The company targets the first such refresh this June with the introduction of first multi-asset index strategy.
The company identified liability-driven investing as a catalyst for success in this business. To that end, it remains focused on expanding asset classes and managing investment risk.
Further, its cash balance has increased over the last few years and its debt to capital ratio improved. Though its senior debt to capital ratio was 14 at first-quarter 2020 end, higher than the industry average of 13, times interest earned, identifying how efficiently the company can service debt, of 17.1% is higher than the industry average of 14.6%. The company exited the first quarter with $1.3 billion of liquidity and a pro forma 396 RBC ratio.
Since the company went public, it has increased dividend each year. Dividends witnessed a 17-year CAGR of 6.7%.
The company has a stellar history of delivering positive earnings surprise in the last 14 reported quarters.
Shares of American Equity have lost 9.7% year to date compared with the industry's decrease of 22.5%. The stock carries an impressive Value Score of B. Value Score helps find stocks that are undervalued. Back-tested results have shown that stocks with a Value Score of A or B and a Zacks Rank #1 (Strong Buy) or #2 are best bets.
Other Stocks to Consider
Some other top-ranked companies in the insurance industry are National General Holdings Corp , Palomar Holdings, Inc. (PLMR - Free Report) and The Allstate Corporation (ALL - Free Report) .
National General, a specialty personal lines insurance holding company, provides various insurance products and services in the United States, Bermuda, Luxembourg and Sweden. Its earnings beat estimates in two of the last four quarters, the average positive surprise being 5.68%. The stock sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Palomar Holdings provides specialty property insurance. The company surpassed estimates in two of the last four quarters, the average positive surprise being 10.93%.The stock carries a Zacks Rank #2.
Allstate provides property and casualty, and other insurance products in the United States and Canada. The company surpassed estimates in each of the last four quarters, the average positive surprise being 18.45%.The stock carries a Zacks Rank #2.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Image: Bigstock
Why You Should Add American Equity (AEL) to Your Portfolio
American Equity Investment Life Holding Company is well-poised for growth, riding on demographic change, product refreshes and solid capital position.
The Zacks Consensus Estimate for 2020 earnings has moved up 1.2% in the past 30 days, reflecting analysts’ optimism. Return on equity of 15.8% in the first quarter of 2020 was better than the industry average of 11.8%, reflecting the company’s efficiency in utilizing shareholders’ fund.
The company’s target market includes individuals in the age group of 45-75, seeking to accumulate tax-deferred savings or create guaranteed lifetime income. Per the U.S. Census Bureau, Americans aged 65 and older will represent 20% of the total population by 2030 from 13% in 2010. Thus, being a premier fixed index annuity producer in the independent agent channel, American Equity is poised to benefit from this demography.
The company also remains focused on capitalizing on increasing popularity of index products.
To retain sustainability and adapt to changes, this Zacks Rank #2 (Buy) life insurer has been undergoing product re-fresh. The company targets the first such refresh this June with the introduction of first multi-asset index strategy.
The company identified liability-driven investing as a catalyst for success in this business. To that end, it remains focused on expanding asset classes and managing investment risk.
Further, its cash balance has increased over the last few years and its debt to capital ratio improved. Though its senior debt to capital ratio was 14 at first-quarter 2020 end, higher than the industry average of 13, times interest earned, identifying how efficiently the company can service debt, of 17.1% is higher than the industry average of 14.6%. The company exited the first quarter with $1.3 billion of liquidity and a pro forma 396 RBC ratio.
Since the company went public, it has increased dividend each year. Dividends witnessed a 17-year CAGR of 6.7%.
The company has a stellar history of delivering positive earnings surprise in the last 14 reported quarters.
Shares of American Equity have lost 9.7% year to date compared with the industry's decrease of 22.5%. The stock carries an impressive Value Score of B. Value Score helps find stocks that are undervalued. Back-tested results have shown that stocks with a Value Score of A or B and a Zacks Rank #1 (Strong Buy) or #2 are best bets.
Other Stocks to Consider
Some other top-ranked companies in the insurance industry are National General Holdings Corp , Palomar Holdings, Inc. (PLMR - Free Report) and The Allstate Corporation (ALL - Free Report) .
National General, a specialty personal lines insurance holding company, provides various insurance products and services in the United States, Bermuda, Luxembourg and Sweden. Its earnings beat estimates in two of the last four quarters, the average positive surprise being 5.68%. The stock sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Palomar Holdings provides specialty property insurance. The company surpassed estimates in two of the last four quarters, the average positive surprise being 10.93%.The stock carries a Zacks Rank #2.
Allstate provides property and casualty, and other insurance products in the United States and Canada. The company surpassed estimates in each of the last four quarters, the average positive surprise being 18.45%.The stock carries a Zacks Rank #2.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>