Critical Analysis: Atlantic American Corporation (AAME) and China Life Insurance Company Limited (LFC)
Atlantic American Corporation (NASDAQ: AAME) and China Life Insurance Company Limited (NYSE:LFC) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their analyst recommendations, risk, valuation, dividends, profitability, earnings and institutional ownership.
Risk & Volatility
Atlantic American Corporation has a beta of 0.42, meaning that its stock price is 58% less volatile than the S&P 500. Comparatively, China Life Insurance Company Limited has a beta of 1.4, meaning that its stock price is 40% more volatile than the S&P 500.
Atlantic American Corporation pays an annual dividend of $0.02 per share and has a dividend yield of 0.5%. China Life Insurance Company Limited pays an annual dividend of $0.14 per share and has a dividend yield of 0.8%. Atlantic American Corporation pays out 14.3% of its earnings in the form of a dividend. China Life Insurance Company Limited pays out 26.4% 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 Corporation has raised its dividend for 3 consecutive years.
This is a breakdown of current recommendations and price targets for Atlantic American Corporation and China Life Insurance Company Limited, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Atlantic American Corporation||0||0||0||0||N/A|
|China Life Insurance Company Limited||0||3||3||0||2.50|
This table compares Atlantic American Corporation and China Life Insurance Company Limited’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Atlantic American Corporation||1.93%||-0.28%||-0.09%|
|China Life Insurance Company Limited||5.21%||10.32%||1.16%|
Insider & Institutional Ownership
5.1% of Atlantic American Corporation shares are held by institutional investors. Comparatively, 0.2% of China Life Insurance Company Limited shares are held by institutional investors. 79.3% of Atlantic American Corporation shares are held 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.
Earnings and Valuation
This table compares Atlantic American Corporation and China Life Insurance Company Limited’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Atlantic American Corporation||$166.08 million||0.46||$2.63 million||$0.14||26.43|
|China Life Insurance Company Limited||$81.43 billion||1.21||$2.88 billion||$0.53||32.96|
China Life Insurance Company Limited has higher revenue and earnings than Atlantic American Corporation. Atlantic American Corporation is trading at a lower price-to-earnings ratio than China Life Insurance Company Limited, indicating that it is currently the more affordable of the two stocks.
China Life Insurance Company Limited beats Atlantic American Corporation on 10 of the 14 factors compared between the two stocks.
About Atlantic American Corporation
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.
About China Life Insurance Company Limited
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.
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