Financial Review of American Equity Investment Life (NYSE:AEL) vs. Midwest (NASDAQ:MDWT)


Investment in American Life equities (NYSE:AELGet a rating) and the Midwest (NASDAQ: MDWTGet a rating) are both finance companies, but which stock is superior? We’ll compare the two companies based on their dividend strength, risk, analyst recommendations, profitability, institutional ownership, earnings and valuation.

Insider and Institutional Ownership

95.2% of American Equity Investment Life’s shares are held by institutional investors. By comparison, 37.4% of Midwest’s shares are held by institutional investors. 1.6% of the shares of American Equity Investment Life are held by insiders of the company. Comparatively, 30.3% of Midwest’s stock is held by company insiders. Strong institutional ownership indicates that large fund managers, hedge funds, and endowments believe a company will outperform the market over the long term.

Profitability

This chart compares the net margins, return on equity, and return on assets of American Equity Investment Life and Midwest.

Net margins Return on equity return on assets
American Equity Life Investment 26.35% 7.26% 0.57%
Midwest -44.36% -5.47% -0.39%

Benefits and evaluation

This chart compares the gross revenue, earnings per share, and valuation of American Equity Investment Life and Midwest.

Gross revenue Price/sales ratio Net revenue Earnings per share Price/earnings ratio
American Equity Life Investment $3.69 billion 0.91 $473.99 million $7.39 4.88
Midwest $30.06 million 1.48 -$16.64 million ($3.98) -2.99

American Equity Investment Life has higher income and profit than Midwest. Midwest trades at a lower price-to-earnings ratio than American Equity Investment Life, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings and price targets for American Equity Investment Life and Midwest, as provided by MarketBeat.

Sales Ratings Hold odds Buy reviews Strong buy odds Rating
American Equity Life Investment 0 2 seven 0 2.78
Midwest 0 2 0 0 2.00

American Equity Investment Life currently has a consensus price target of $42.60, indicating a potential upside of 18.04%. The Midwest has a consensus price target of $12.00, indicating a potential upside of 0.86%. Given American Equity Investment Life’s better consensus rating and higher possible upside, equity research analysts clearly believe that American Equity Investment Life is more favorable than Midwest.

Risk and Volatility

American Equity Investment Life has a beta of 1.1, indicating its stock price is 10% more volatile than the S&P 500. By comparison, Midwest has a beta of 0.26, indicating its stock price is 74 % less volatile than the S&P 500.

Summary

American Equity Investment Life beats Midwest on 12 out of 14 factors compared between the two stocks.

About American Equity Investment Life (Get a rating)

American Equity Investment Life Holding Company, through its subsidiaries, provides life insurance products in the United States. The company issues index and fixed 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 advisers. American Equity Investment Life Holding Company was incorporated in 1995 and is headquartered in West Des Moines, Iowa.

About the Midwest (Get a rating)

Midwest Holding Inc., a financial services company, is engaged in life insurance and annuity business in the United States. The Company offers multi-year fixed and guaranteed indexed annuity products through independent distributors comprising independent marketing organizations. It also provides asset management services to third party insurers and reinsurers; and other services, including policy administration services. The company was incorporated in 2003 and is based in Lincoln, Nebraska.



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