Brighthouse Financial (NASDAQ:BHF) and American Equity Investment Life (NYSE:AEL) are both mid-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, risk, dividends, analyst recommendations, profitability, earnings and valuation.

Insider and Institutional Ownership

87.4% of Brighthouse Financial shares are held by institutional investors. Comparatively, 94.7% of American Equity Investment Life shares are held by institutional investors. 0.0% of Brighthouse Financial shares are held by company insiders. Comparatively, 1.9% of American Equity Investment Life shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Brighthouse Financial and American Equity Investment Life’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Brighthouse Financial $6.84 billion 0.78 -$378.00 million N/A N/A
American Equity Investment Life $3.89 billion 0.82 $174.64 million $3.16 11.23

American Equity Investment Life has lower revenue, but higher earnings than Brighthouse Financial.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Brighthouse Financial and American Equity Investment Life, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Brighthouse Financial 2 10 2 0 2.00
American Equity Investment Life 0 3 3 0 2.50

Brighthouse Financial currently has a consensus target price of $56.77, suggesting a potential upside of 26.63%. American Equity Investment Life has a consensus target price of $34.33, suggesting a potential downside of 3.29%. Given Brighthouse Financial’s higher possible upside, analysts plainly believe Brighthouse Financial is more favorable than American Equity Investment Life.

Profitability

This table compares Brighthouse Financial and American Equity Investment Life’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Brighthouse Financial -7.88% 5.58% 0.35%
American Equity Investment Life 11.14% 12.32% 0.53%

Dividends

American Equity Investment Life pays an annual dividend of $0.26 per share and has a dividend yield of 0.7%. Brighthouse Financial does not pay a dividend. American Equity Investment Life pays out 8.2% of its earnings in the form of a dividend. American Equity Investment Life has increased its dividend for 5 consecutive years.

Summary

American Equity Investment Life beats Brighthouse Financial on 12 of the 15 factors compared between the two stocks.

Brighthouse Financial Company Profile

Brighthouse Financial, Inc. provides a range of annuity and life insurance products in the United States. The company operates through three segments: Annuities, Life, and Run-off. It offers variable, fixed, index-linked, and income annuities for contract holders' needs for protected wealth accumulation on a tax-deferred basis, wealth transfer, and income security; and term, whole, universal, and variable life insurance products for policyholders' needs for financial security and protected wealth transfer. The company was founded in 2016 and is headquartered in Charlotte, North Carolina.

American Equity Investment Life Company Profile

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 premium immediate annuities, as well as life insurance products. The company markets its products through various distribution channels, including national marketing organizations, broker/dealers, banks, and registered investment advisors. American Equity Investment Life Holding Company was founded in 1995 and is based in West Des Moines, Iowa.

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