AXA Finds The Financial Sweet Spot

Asset manager AXA Group (NYSE:AXA) has the world as its marketplace. Despite the credit crunch and volatility in the U.S. markets, AXA is set to capitalize on graying of baby boomers around the world. An increasing need for investment advice presents a solid opportunity for its asset management and insurance services to flourish. Rather than trying to decide if financials have hit rock bottom, investors should consider adding global insurers with healthy dividend payouts to their portfolios.

Global Insurers
The short list of insurers who also offer asset management is truly an international who's who of well known companies.

• AXA Group is headquartered in France,
• AIG (NYSE:AIG), the world's largest insurer, continues to grab headlines in the U.S.
• Allianz SE (NYSE:AZ) is Europe's largest insurer and calls Germany home
• ING Groep NV (NYSE:ING) is based in the Netherlands.

Allianz is paying a 4.1% dividend, while ING's payout is equally attractive at 5.3%. AXA leads the group with a 5.6% yield.

AXA Snapshot
AXA is composed of five operating segments: Life and Savings, Property and Casualty, International Insurance, Asset Management and Other Financial Services. Top line revenue from 2005 to 2007 increased 31% from 72 billion euros to 94 billion euros. Life and Savings generated 64% of AXA's revenues while Property & Casualty accounted for 27%.

International Revenue Offers Support
AXA's global footprint allows it to offer insurance for everything from rare collectibles to automobiles and annuity products with promises of guaranteed income for customers in the old and new world. Despite a 14% decrease in revenue from the U.S. for the first quarter, total revenue for AXA's Life and Savings segment only declined 2.3% to 17 billion euros from the previous year.

Europe made up 18% of AXA's revenue for the first quarter with 5.3 billion euros, and the Asia Pacific region contributed 7%, 1.9 billion euros. AXA's biggest bright spot was its Mediterranean region where revenue soared 230% during the same time period to 1.3 billion euros more than making up for the losses in the U.S. High growth markets for AXA include Asia, Turkey, Morocco and the Gulf region driven by car and home insurance policies. (For more on the importance of diversifying across global borders, read Going International.)

Asset Management
AXA is also the parent of the highly regarded, U.S.-based, asset management firm AllianceBernstein (NYSE:AB). AXA has said that trends, including the growing popularity of self directed retirement plans and pension fund managers thirst for diversification, will lead to an increase in the need for asset management advice and investment services. While Alliance Bernstein experienced 1 billion euros worth of net outflows, AXA Investment Management, AXA's in-house counterpart, experienced net inflows of 4.5 billion euros during the volatile first quarter. Dividend seekers will be pleased to note that AllianceBernstein currently pays an attractive 5% yield.

Too hard to call a bottom
Instead of trying to figure out the end of the credit crunch, its better to follow trends that are taking shape today. We all know the importance of international exposure, but let's not lose sight of the idea that products and services for aging individuals and retirees are sweet spots. The AXA Group is trading just $2 above its current book value. Similarly Allianz SE is trading just $3 above its book value. The decline of AIG's stock and the credit fallout have dragged down the insurance sector, but these global insurers have attractive yields, diverse streams of income and valuations that could profit the long term investor.

For further reading, see our related articles, The Power of Dividend Growth and Dividend Facts You May Not Know.