NYSE:AEL

Stock Analysis Report

American Equity Investment Life Holding

Executive Summary

American Equity Investment Life Holding Company, through its subsidiaries, provides life insurance products and services in the United States.

Snowflake

Fundamentals

Very undervalued with adequate balance sheet and pays a dividend.

Risks

  • American Equity Investment Life Holding has significant price volatility in the past 3 months.

Similar Companies

Share Price & News

How has American Equity Investment Life Holding's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

3.8%

NYSE:AEL

0.5%

US Insurance

0.9%

US Market


1 Year Return

-40.3%

NYSE:AEL

8.8%

US Insurance

0.3%

US Market

AEL underperformed the Insurance industry which returned 8.8% over the past year.

AEL underperformed the Market in United States of America which returned 0.3% over the past year.


Share holder returns

AELIndustryMarket
7 Day3.8%0.5%0.9%
30 Day-14.2%-1.8%-1.9%
90 Day-22.1%2.0%1.6%
1 Year-39.8%-40.3%11.5%8.8%2.6%0.3%
3 Year37.3%33.4%45.8%34.8%41.0%31.8%
5 Year-4.6%-8.7%66.3%46.6%55.2%38.0%

Price Volatility Vs. Market

How volatile is American Equity Investment Life Holding's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is American Equity Investment Life Holding undervalued based on future cash flows and its price relative to the stock market?

>50%

Discount to future cash flow value


Intrinsic Value Based on Future Cash Flows

American Equity Investment Life Holding's share price is below the future cash flow value, and at a moderate discount (> 20%).

American Equity Investment Life Holding's share price is below the future cash flow value, and at a substantial discount (> 40%).


Price Based on Earnings

American Equity Investment Life Holding is good value based on earnings compared to the US Insurance industry average.

American Equity Investment Life Holding is good value based on earnings compared to the United States of America market.


Price Based on Expected Growth

American Equity Investment Life Holding is good value based on expected growth next year.


Price Based on Value of Assets

American Equity Investment Life Holding is good value based on assets compared to the US Insurance industry average.


Next Steps

Future Growth

How is American Equity Investment Life Holding expected to perform in the next 1 to 3 years based on estimates from 8 analysts?

34.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

American Equity Investment Life Holding's revenue is expected to grow by 5.1% yearly, however this is not considered high growth (20% yearly).

American Equity Investment Life Holding's earnings are expected to grow significantly at over 20% yearly.

American Equity Investment Life Holding's revenue growth is positive but not above the United States of America market average.

American Equity Investment Life Holding's earnings growth is expected to exceed the United States of America market average.

American Equity Investment Life Holding's earnings growth is expected to exceed the low risk savings rate of 2.7%.


Earnings per Share Growth Estimates


Future Return on Equity

American Equity Investment Life Holding is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).


Next Steps

Past Performance

How has American Equity Investment Life Holding performed over the past 5 years?

21.0%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

American Equity Investment Life Holding has delivered over 20% year on year earnings growth in the past 5 years.

American Equity Investment Life Holding's 1-year earnings growth is negative, it can't be compared to the 5-year average.

American Equity Investment Life Holding's 1-year earnings growth is negative, it can't be compared to the US Insurance industry average.


Return on Equity

American Equity Investment Life Holding has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).


Return on Assets

American Equity Investment Life Holding used its assets less efficiently than the US Insurance industry average last year based on Return on Assets.


Return on Capital Employed

American Equity Investment Life Holding has significantly improved its use of capital last year versus 3 years ago (Return on Capital Employed).


Next Steps

Financial Health

How is American Equity Investment Life Holding's financial position?


Financial Position Analysis

American Equity Investment Life Holding's short term (1 year) commitments are greater than its holdings of cash and other short term assets.

American Equity Investment Life Holding's long term commitments exceed its cash and other short term assets.


Debt to Equity History and Analysis

American Equity Investment Life Holding's level of debt (21.1%) compared to net worth is satisfactory (less than 40%).

The level of debt compared to net worth has been reduced over the past 5 years (37.8% vs 21.1% today).

Debt is well covered by operating cash flow (278.5%, greater than 20% of total debt).

Interest payments on debt are well covered by earnings (EBIT is 7x coverage).


Balance Sheet

Low level of unsold assets.

Debt is covered by short term assets, assets are 3.6x debt.


Next Steps

Dividend

What is American Equity Investment Life Holding's current dividend yield, its reliability and sustainability?

1.44%

Expected Dividend Yield


Dividend Yield and Payments Analysis

American Equity Investment Life Holding's pays a lower dividend yield than the bottom 25% of dividend payers in United States of America (1.48%).

American Equity Investment Life Holding's dividend is below the markets top 25% of dividend payers in United States of America (3.83%).

Dividends per share have been stable in the past 10 years.

Dividends per share have increased over the past 10 years.


Current Payout to Shareholders

Dividends paid are thoroughly covered by earnings (8.3x coverage).


Future Payout to Shareholders

Dividends after 3 years are expected to be thoroughly covered by earnings (12.3x coverage).


Next Steps

Management

What is the CEO of American Equity Investment Life Holding's salary, the management and board of directors tenure and is there insider trading?

3.6yrs

Average management tenure


CEO

John Matovina (65yo)

7.2yrs

Tenure

US$3,552,535

Compensation

Mr. John Michael Matovina has been the Chief Executive Officer and President of American Equity Investment Life Holding Company since June 27, 2012. Mr. Matovina served as the Chief Financial Officer and T ...


CEO Compensation Analysis

John's remuneration is about average for companies of similar size in United States of America.

John's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Management Age and Tenure

3.6yrs

Average Tenure

49yo

Average Age

The tenure for the American Equity Investment Life Holding management team is about average.


Board Age and Tenure

9.5yrs

Average Tenure

66.5yo

Average Age

The tenure for the American Equity Investment Life Holding board of directors is about average.


Insider Trading

American Equity Investment Life Holding individual insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$338,25401 Jul 19
Jeffrey Lorenzen
EntityIndividual
Role
Chief Investment Officer
Executive VP & Chief Investment Officer
Shares12,413
Max PriceUS$27.25
SellUS$269,00001 Jul 19
Joyce Chapman
EntityIndividual
Role
Member of the Board of Directors
Director
Shares10,000
Max PriceUS$26.90
SellUS$261,10027 Jun 19
Ted Johnson
EntityIndividual
Role
Chief Financial Officer
CFO & Treasurer
Shares10,000
Max PriceUS$26.11
SellUS$2,192,14420 Jun 19
Debra Richardson
EntityIndividual
Role
Member of the Board of Directors
Director
Shares80,000
Max PriceUS$27.40

Ownership Breakdown


Management Team

  • Julie LaFollette

    Director of Investor Relations

    • Tenure: 0.0yrs
  • Ted Johnson (49yo)

    CFO & Treasurer

    • Tenure: 7.2yrs
    • Compensation: US$1.95m
  • John Matovina (65yo)

    Chairman

    • Tenure: 7.2yrs
    • Compensation: US$3.55m
  • Jeff Lorenzen (53yo)

    Executive VP & Chief Investment Officer

    • Tenure: 10.6yrs
    • Compensation: US$1.68m
  • Ron Grensteiner (56yo)

    President of American Equity Investment Life Insurance Company

    • Tenure: 0.0yrs
    • Compensation: US$1.86m
  • Scott Samuelson (46yo)

    VP & Chief Accounting Officer

    • Tenure: 2.2yrs
  • Renee Montz (47yo)

    Executive VP

    • Tenure: 3.3yrs
    • Compensation: US$1.63m
  • Steven Schwartz

    Vice President of Investor Relations

    • Tenure: 3.6yrs
  • Harley Whitfield

    Senior Vice President of Resolutions

    • Tenure: 0.0yrs
  • Jennifer Bryant (47yo)

    Executive VP & Chief HR Officer

    • Tenure: 2.8yrs

Board Members

  • Bill Kunkel (62yo)

    Director

    • Tenure: 3.2yrs
    • Compensation: US$176.30k
  • Joyce Chapman (74yo)

    Director

    • Tenure: 11.0yrs
    • Compensation: US$183.04k
  • David Mulcahy (66yo)

    Director

    • Tenure: 8.6yrs
    • Compensation: US$212.54k
  • James Gerlach (76yo)

    Director

    • Tenure: 23.6yrs
    • Compensation: US$173.80k
  • John Matovina (65yo)

    Chairman

    • Tenure: 7.2yrs
    • Compensation: US$3.55m
  • Debbie Richardson (62yo)

    Director

    • Tenure: 11.0yrs
    • Compensation: US$169.30k
  • Lonnie Strickland (77yo)

    Director

    • Tenure: 23.6yrs
    • Compensation: US$182.30k
  • Bob Howe (76yo)

    Lead Independent Director

    • Tenure: 10.0yrs
    • Compensation: US$202.80k
  • Alan Matula (59yo)

    Director

    • Tenure: 3.7yrs
    • Compensation: US$170.80k
  • Gerard Neugent (67yo)

    Director

    • Tenure: 9.0yrs
    • Compensation: US$172.51k

Company Information

American Equity Investment Life Holding Company's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: American Equity Investment Life Holding Company
  • Ticker: AEL
  • Exchange: NYSE
  • Founded: 1995
  • Industry: Life and Health Insurance
  • Sector: Insurance
  • Market Cap: US$2.031b
  • Shares outstanding: 90.98m
  • Website: https://www.american-equity.com

Number of Employees


Location

  • American Equity Investment Life Holding Company
  • 6000 Westown Parkway
  • West Des Moines
  • Iowa
  • 50266
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
AELNYSE (New York Stock Exchange)YesCommon StockUSUSDDec 2003

Biography

American Equity Investment Life Holding Company, through its subsidiaries, provides life insurance products and services in the United States. The company issues fixed index and rate annuities; and single  ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/08/21 00:00
End of Day Share Price2019/08/20 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.