Head-To-Head Analysis: China Life Insurance (LFC) and Atlantic American (AAME)

China Life Insurance (NYSE: LFC) and Atlantic American (NASDAQ:AAME) are both financials companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, earnings, institutional ownership, risk, profitability and valuation.

Profitability

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

Net Margins Return on Equity Return on Assets
China Life Insurance 3.14% 7.98% 0.89%
Atlantic American 1.93% -0.28% -0.09%

Risk and Volatility

China Life Insurance has a beta of 1.39, suggesting that its share price is 39% more volatile than the S&P 500. Comparatively, Atlantic American has a beta of 0.43, suggesting that its share price is 57% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations and price targets for China Life Insurance and Atlantic American, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
China Life Insurance 1 3 3 0 2.29
Atlantic American 0 0 0 0 N/A

Valuation and Earnings

This table compares China Life Insurance and Atlantic American’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
China Life Insurance $81.43 billion 1.09 $2.88 billion $0.57 27.63
Atlantic American $166.08 million 0.41 $2.63 million $0.14 23.86

China Life Insurance has higher revenue and earnings than Atlantic American. Atlantic American is trading at a lower price-to-earnings ratio than China Life Insurance, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

0.3% of China Life Insurance shares are owned by institutional investors. Comparatively, 5.2% of Atlantic American shares are owned by institutional investors. 79.3% of Atlantic American shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Dividends

China Life Insurance pays an annual dividend of $0.14 per share and has a dividend yield of 0.9%. Atlantic American pays an annual dividend of $0.02 per share and has a dividend yield of 0.6%. China Life Insurance pays out 24.6% of its earnings in the form of a dividend. Atlantic American pays out 14.3% 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. Atlantic American has increased its dividend for 4 consecutive years.

Summary

China Life Insurance beats Atlantic American on 11 of the 15 factors compared between the two stocks.

China Life Insurance Company Profile

China Life Insurance Company Limited is a life insurance company. The Company provides a range of insurance products, including individual and group life insurance, health insurance and accident insurance products. It operates through three segments: Life Insurance, Health Insurance, and Accident Insurance. Its Life Insurance segment provides participating and non-participating life insurance and annuities to individuals and groups. Its Health Insurance segment provides short-term and long-term health insurance to individuals and groups. Its Accident Insurance segment provides short-term and long-term accident insurance to individuals and groups.

Atlantic American Company Profile

Atlantic American Corporation is a holding company that operates through its subsidiaries in specialty markets within the life and health, and property and casualty insurance industries. The Company’s principal operating subsidiaries are American Southern Insurance Company and American Safety Insurance Company (together known as American Southern) within the property and casualty insurance industry, and Bankers Fidelity Life Insurance Company and Bankers Fidelity Assurance Company (together known as Bankers Fidelity) within the life and health insurance industry. Each of American Southern and Bankers Fidelity is managed separately based upon the type of products it offers. American Southern’s product lines include business automobile insurance policies, General Liability Insurance policies, Property Insurance policies and Surety Bonds. Products offered by Bankers Fidelity include ordinary and term life insurance, Medicare supplement and other accident and health insurance products.

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