American Equity Investment Life Holding (NYSE: AEL) and FBL Financial Group (NYSE:FFG) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, valuation, institutional ownership, dividends, analyst recommendations, risk and earnings.
Earnings and Valuation
This table compares American Equity Investment Life Holding and FBL Financial Group’s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| American Equity Investment Life Holding | $3.00 billion | 0.84 | $343.94 million | $2.16 | 13.08 |
| FBL Financial Group | $736.38 million | 2.33 | $184.11 million | $4.61 | 14.96 |
American Equity Investment Life Holding has higher revenue and earnings than FBL Financial Group. American Equity Investment Life Holding is trading at a lower price-to-earnings ratio than FBL Financial Group, indicating that it is currently the more affordable of the two stocks.
Dividends
American Equity Investment Life Holding pays an annual dividend of $0.24 per share and has a dividend yield of 0.8%. FBL Financial Group pays an annual dividend of $1.76 per share and has a dividend yield of 2.6%. American Equity Investment Life Holding pays out 11.1% of its earnings in the form of a dividend. FBL Financial Group pays out 38.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. American Equity Investment Life Holding has raised its dividend for 4 consecutive years and FBL Financial Group has raised its dividend for 4 consecutive years.
Analyst Recommendations
This is a summary of current ratings and target prices for American Equity Investment Life Holding and FBL Financial Group, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| American Equity Investment Life Holding | 0 | 5 | 2 | 0 | 2.29 |
| FBL Financial Group | 0 | 1 | 0 | 0 | 2.00 |
American Equity Investment Life Holding presently has a consensus target price of $24.43, suggesting a potential downside of 13.53%. Given American Equity Investment Life Holding’s stronger consensus rating and higher probable upside, equities research analysts clearly believe American Equity Investment Life Holding is more favorable than FBL Financial Group.
Risk & Volatility
American Equity Investment Life Holding has a beta of 2.49, suggesting that its stock price is 149% more volatile than the S&P 500. Comparatively, FBL Financial Group has a beta of 0.88, suggesting that its stock price is 12% less volatile than the S&P 500.
Institutional and Insider Ownership
93.8% of American Equity Investment Life Holding shares are owned by institutional investors. Comparatively, 29.4% of FBL Financial Group shares are owned by institutional investors. 4.1% of American Equity Investment Life Holding shares are owned by insiders. Comparatively, 0.6% of FBL Financial Group shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Profitability
This table compares American Equity Investment Life Holding and FBL Financial Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| American Equity Investment Life Holding | 6.48% | 6.84% | 0.30% |
| FBL Financial Group | 15.70% | 9.12% | 1.16% |
Summary
American Equity Investment Life Holding beats FBL Financial Group on 9 of the 16 factors compared between the two stocks.
About American Equity Investment Life Holding
American Equity Investment Life Holding Company is engaged in the development and sale of fixed index and fixed rate annuity products. The Company issues fixed annuity and life insurance products through its life insurance subsidiaries, American Equity Investment Life Insurance Company, American Equity Investment Life Insurance Company of New York and Eagle Life Insurance Company. Its target market includes the group of individuals aged 45 to 75 seeking to accumulate tax-deferred savings or create guaranteed lifetime income. The Company distributes through a range of distribution channels, including independent agents, broker/dealers, banks and registered investment advisors. Its product types include fixed index annuities, annual reset fixed rate annuities, multi-year fixed rate annuities and single premium immediate annuities. Its life insurance products include traditional ordinary and term, universal life and other interest-sensitive life insurance products.
About FBL Financial Group
FBL Financial Group, Inc. sells individual life insurance and annuity products under the brand name of Farm Bureau Financial Services. The Company’s segments are Annuity Segment, which sells a variety of traditional annuity products; Life Insurance Segment, which sells a range of traditional and universal life insurance products, and Corporate and Other segment, which provides various support operations, corporate capital and other product lines. It also offers life and annuity products through its subsidiary, Greenfields Life Insurance Company. Its other subsidiaries support various functional areas and affiliates by providing investment advisory and marketing and distribution services. It manages all aspects of two Farm Bureau affiliated property-casualty insurance companies, Farm Bureau Property & Casualty Insurance Company and Western Agricultural Insurance Company.
Receive News & Ratings for American Equity Investment Life Holding Company Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for American Equity Investment Life Holding Company and related companies with MarketBeat.com's FREE daily email newsletter.
