American Equity Investment Life Holding Company (AEL) Company Bio
American Equity Investment Life Holding Company issues fixed annuity and life insurance products, with a primary emphasis on the sale of fixed index and fixed rate annuities. The company was founded in 1995 and is based in West Des Moines, Iowa.
AEL Price Forecast Based on DCF Valuation
DCF Fair Value Target:
The table below illustrates the output of a discounted cash flow forecast using a variety of scenarios for American Equity Investment Life Holding Co. To summarize, we found that American Equity Investment Life Holding Co ranked in the 79th percentile in terms of potential gain offered. Moreover, under all the scenarios we modelled, the output consistently forecasted positive returns. As for the metrics that stood out in our discounted cash flow analysis of American Equity Investment Life Holding Co, consider:
The company's debt burden, as measured by earnings divided by interest payments, is 17.12 -- which is good for besting 76.82% of its peer stocks (US stocks in the Financial Services sector with positive cash flow).
American Equity Investment Life Holding Co's weighted average cost of capital (WACC) is 7%; for context, that number is higher than only 21.84% of tickers in our DCF set.
AEL's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than only 21.84% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Financial Services that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as AEL, try ATAX, FOCS, TSLX, RNR, and UNM.
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American Equity Investment Life (AEL) is one of those under the radar companies that you love to come across. Although the company has very little following, it has a fantastic business model based on its status in the fixed index annuity world. The company has also built a strong, conservative...