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Fundamental analysis: American Equity Investment Life Holding Company (AEL)

Awarener score: 6.4

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (could not be estimated), the business stability (Very poor) and growth (Very good), and the company's inclination to return cash to the stockholders (Good).

Note: All scores range from 1 (worst) to 10 (best). Conclusions are updated daily with closing stock prices and new reported quarterly financial statements.

Revenue score: 5.0

  • Business has been growing at a very good pace. It's been almost average when measured against peer companies.
  • American Equity Investment Life Holding Company business varies frequently, ups and downs are normal. It's risky. It looks worse than most rivals.

Margins score: 7.2

  • AEL profit margins -on goods and services sold- are usually destitute. They stand slightly worse than rival companies.
  • Business profit on sales tends to be meagre. It's substantially worse when measured against competitors.
  • Profits on sales made -available to repay debt and purchase properties- are usually huge. They remain excellent in relation to peers.
  • Earnings -before income taxes and interests on loans taken- tend to be huge in relation to total revenues. They're still better than most similar companies.
  • Profits -before income taxes- are usually excellent considering total sales, and remain more than average in relation to rivals.
  • Total net profit tends to be excellent when confronted to sales. Company stands similar to comparable firms.

Growth score: 7.4

  • American Equity Investment Life Holding Company has an unknown gross margin growth, as there is not enough data to analyze. It's been impossible to compare to competitors.
  • There is not sufficient data to estimate the operating income margin trend, which has been therefore unknown against comparable firms.
  • Profits -available to repay debt and purchase properties- have been growing at a low pace, which compares almost average when measured against peer enterprises.
  • Earnings -before income taxes and interests on loans taken- have been growing at a slow tempo. It turns to be close to average when compared to similar stocks.
  • In past years, profits -before income taxes- grew at an excellent speed. It was somewhat better than rivals.
  • In the previous years, growth trend on total net profit has been excellent, and more than average in relation to peer companies.
  • Earnings per share have grown at an excellent rhythm in past years. It's been in good shape compared to industry peers.

Miscellaneous score: 5.0

  • AEL had to pay some income taxes in relation to profits made in the past years. It's been worse than most peers.
  • The company does not report R&D expenses. It's meaningless to measure in relation to competitors.
  • We have insufficient data to estimate how effective is research and development effort. It stands unknown against rival companies.

Profitability score: 8.0

  • American Equity Investment Life Holding Company usually gets good returns on the resources it controls. It proves encouraging in relation to peer firms.
  • The company normally gets huge proceeds -on the resources directly invested in the business-. They remain impressive in relation to similar companies.
  • There's usually excellent profitability -in relation to owned resources-. It ranks encouraging in relation to competitors.
  • In the past, got sufficient returns -on the tangible resources it controls-. This metric is usually related to the industry in which operates and combines profitability versus reinvestment needs. It's encouraging in relation to comparable enterprises.

Usage of Funds score: 7.9

  • AEL usually uses a sparse portion of genuine funds generated to buy or replace property, plant, or equipment. The need for reinvestments is modest. It stands encouraging in relation to rival firms.
  • The company is usually largely investing in new property, plant, and equipment, to expand its operating capabilities, which is great when measured against industry peers.
  • In the past twelve months it paid some dividends, considering the current stock price. It came mediocre against competitors.
  • Has greatly increased dividend payments in the past years. Business prospects are most likely good. The company has behaved excellent in relation to similar firms.
  • Dividend payments usually represent a non-significant portion of genuine funds generation and are likely very safe. Sustainability looks better than most comparable companies.
  • The company somewhat enlarges a bit the pool of investors, resulting in more mouths feeding on the pie of profits. It remains in a very weak position compared to peer enterprises.
  • Repurchase effectiveness metric is very complex. Run again in analytical mode if you're interested in a technical explanation. It stands rather normal in relation to rivals.
  • The company uses a non-significant portion of genuine fund generation to reward investors. The company is usually improving its financial position, and could greatly boost stockholder rewards if it wished so. It still looks top tier when measured against competitors.

Balance Sheet score: 7.9

  • American Equity Investment Life Holding Company has no intangible assets (like brands and goodwill) according to accounting books, which is safest. It happens to be top tier when measured against peer companies.
  • The company has plenty short-term resources to face short-term obligations. There're no liquidity concerns. It turns to be a slight improvement compared to similar firms.
  • Almost no resources controlled were provided for with financial debt. Financial strength is great. Company could significantly increase debt if it wished so, to reinvest in business, to buy a smaller company or to reward stockholders. It remains somewhat better than rival firms.
  • Controlled resources can be made into cash within reason, which is quite good for liquidity. It looks top tier when measured against rivals.
  • For every dollar of short-term obligations, the company has plenty of dollars in cash and short-term receivables. It's a slight improvement compared to peer firms.
  • For every dollar of short-term obligations, the company has plenty of dollars in cash and equivalents, which is somewhat better than similar enterprises.
  • Usually, sales are mostly on cash. It still ranks encouraging in relation to peers.
  • Days of inventory outstanding are not known. It comes up as a big question mark against competitors.
  • We could not gauge the normal operating cycle of the company. It happens to be a mystery against peers.
  • Unfortunately, we had not enough data to estimate the days of payables outstanding. It ranks unknown against industry peers.
  • Cash conversion cycle remains unknown, due to not having enough inputs. It's incomparable against similar companies.
  • Usual business earnings are mostly consumed by net interest expenses. Creditors may be earning money by assuming risks, but stockholders not so much. Profitability must increase, lest the firm risks only working for creditors' benefit. It stands worse than most rival firms.
  • Business earnings have usually been excellent when measured against loans taken. It could take less than two years to repay the obligations with current profitability. It ranks top tier when measured against comparable enterprises.
  • Fixed assets turnover remains undisclosed. It looks we cannot relate it to similar firms.
  • Resource exploitation is very low when yearly sales are considered, business volume must be greatly increased. This metric is normally tied to the industry where the firm belongs. It's still worse than most peer companies.

Valuation score: 8.2

  • American Equity Investment Life Holding Company has an unknown adjusted Price-to-Earnings ratio, so we cannot comment on that. It happens to be a necessary comparison against competitors.
  • Price-to-Tangible-Book-Value is a fairly complex metric. Run again in analytical mode if you're interested in a technical explanation. It remains close to average when compared to peers.
  • There is insufficient information on the genuine funds generation capability showed in the past twelve months, which stands as an incognita in relation to similar companies.
  • Unfortunately, lack of enough yearly data impaired our ability to estimate the normal earnings power. It's still an unknown variable to measure against industry firms.
  • In the past twelve months, the company has barely rewarded investors, considering both dividends and share on the pie of earnings. It came up lacking compared to peer ventures.
  • We are unsure on the relationship between net financial position and market capitalization of the stock. It looks we will not be able to reach a conclusion regarding similar enterprises.
  • Considering the past twelve months, traditional Price-to-Earnings relation looks extremely cheap. Possible reasons are that the market might be betting current earnings will be very hard to sustain through time, or that the company has very high fund needs, a weak financial position, or that earnings aren't representative. If that isn't the case, the stock price could be extremely attractive. It ranks great when measured against peer companies.
  • Comparing the current stock price with the past twelve-months revenues gives a not far from one-to-one relationship. This is an important metric to check its evolution through time, and to compare to industry peers. It looks in a weak position compared to rival firms.
  • The relation between the stock price and accounting book value might be more than reasonable. It's important both to check this metric through time and to compare it with rival companies. The company remains slightly worse than peer firms.
  • We could not gauge an alternative metric of earnings power of the past twelve months. It happens to be an interesting metric to relate to industry peers.
  • An alternate metric on the usual genuine-funds generation ability could not be provided. It's still unknown against peer companies.

Total score: 7.1


AEL logos

Company at a glance: American Equity Investment Life Holding Company (AEL)

Sector, industry: Financial Services, Insurance—Life

Market Cap: 3.44 billions

Revenues TTM: 4.03 billions

American Equity Investment Life Holding Company, through its subsidiaries, provides life insurance products in the United States. The company issues fixed index and rate annuities, as well as single premium immediate annuities. It markets its products through independent agents, including independent marketing organizations, broker/dealers, banks, and registered investment advisors. American Equity Investment Life Holding Company was incorporated in 1995 and is headquartered in West Des Moines, Iowa.

Awarener score: 6.4

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (could not be estimated), the business stability (Very poor) and growth (Very good), and the company's inclination to return cash to the stockholders (Good).