Dallas, Texas 10/25/2013 (Financialstrend) – American International Group Inc (NYSE:AIG) is coasting on the back of strong revenue and operational results being announced by other mortgage insurance players in the market. In the past one month it has appreciated its market value by 4.5%. This uptake was fuelled by better than expected results from, MGIC investments. The rally upwards was sustained by investors putting their money where their mouth is and over subscribing the IPO of Springleaf. Investors have also been paying close attention to the strong income contribution of close to $73 million from AIG’s super performing “mortgage insurance unit” which is branded as United Guaranty. In the 2Q, AIG had clocked close to $1.7 billion in net income.
The recent Bull Run executed by the stock of this reinsurer has taken its stock price close to its 52 week high valuation. On October 24, the stock was trading at $51.80 per share 2.8% below its 52 week high price of $53.33 per share. Rating agency Sterne Agee has decided to retain its previous rating of Hold on the AIG stock. It has also reiterated his earlier price target of $51 per share.
This S&P 500 tracked stock has a market capitalization of $76.5 billion. In the past 12 months it had managed to bring in sales of $63.2 billion which led to income of $6.77 billion in the same period. Part of these profits has been shared with the share holders by the company by offering 0.77% dividend per share in the last 12 months. This translates to a 0.77% dividend yield which will sit well with investors. This is because; the stock has appreciated by 46% in the past 12 months, leading to a strong increase in share holder value. When the reinsurer posts its 3Q results, investors would be keenly watching to figure out the 4Q recommendations.