American International Group, Inc. AIG recently announced that it will redeem outstanding $290 million, 4.90% Callable Notes due Jul 17, 2045. The company will pay 100% of the principal amount of the Notes, along with the accrued and unpaid interest to the registered holders of the Notes.
AIG has always been committed to increasing shareholders’ value. The company’s strategic initiatives to improve profitability and reduce liabilities make it well positioned for future growth. Over past three months, the shares of AIG have gained 2.2% outperforming the Zacks categorized Multi Line Insurance industry’s gain of 1.8%.
At the end of first-quarter 2017, AIG had $30.7 million of long-term debt, down 0.5% from year-end 2016 and 3.9% lower than the prior-year quarter. The company has taken several initiatives to pay off its debt that primarily include notes issuance and divestures. Resultantly, its interest expenses have also declined significantly. At the end of the first quarter, the company witnessed nearly 3% year-over-year decline in the interest expenses
Also, the company’s present liquidity position clearly reflects its debt servicing capacity.
At the end of first-quarter 2017, AIG had nearly $27 billion in cash and total assets worth $500 million. As of Mar 31, 2017, both of its current and quick ratios were 0.27, up 17% from the prior-year quarter as well as year-end 2016. The latest debt redemption is expected to help in reducing the company’s debt level and interest expenses.
Zacks Rank and Stocks to Consider
Currently, AIG carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks from the same space include Assurant, Inc. AIZ, Cigna Corporation CI and Old Republic International Corporation ORI. Each of these stocks holds a Zacks Rank #2 (Buy).
Assurant offers risk management solutions for housing and lifestyle markets worldwide. The company delivered positive surprises in three of the last four quarters with an average beat of 6.82%.
Cigna provides insurance and related products and services in the U.S and internationally. The company delivered positive surprises in three of the last four quarters with an average beat of 1.35%.
Old Republic deals in the insurance underwriting and related services business, primarily in the U.S. and Canada. The company delivered positive surprises in two of the last four quarters with an average beat of 12.71%.
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