AXA shares: Price analysis before buying or selling

Can I receive dividends when I buy AXA shares?

Yes - Access to dividends

ISIN code: FR0000120628

Ticker: EPA: CS

Index or market: CAC 40

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Elements to consider before selling or buying AXA shares

Analysis N°1

As part of this analysis, the insurance industry, and more specifically the life insurance segment that generates a large portion of this group's revenues, will need to be closely monitored.

Analysis N°2

Similarly, AXA's positioning in emerging markets and all operations carried out by the group to increase its presence in these markets will be closely monitored.

Analysis N°3

The digital sector and online sales are also an important means for AXA to increase its sales. Indeed, it will be necessary to closely monitor the development of new online services by the group.

Analysis N°4

The economic situation in the countries in which the AXA Group operates will of course also have an undeniable influence on this value and you should therefore monitor this data.

Analysis N°5

Of course, like all insurance companies, the AXA Group could see its profitability threatened by an increase in claims and damages. Attention will therefore be paid to these statistics.

Analysis N°6

Finally, it will of course be necessary to take into account the increasingly strong competition from this sector of activity throughout the world and therefore the current events of its main adversaries.

Analysis before buying or selling AXA shares

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General presentation of AXA

Particularly well known in France, the AXA Group is in fact the European leader in the insurance sector and its turnover is generated by diverse and multiple activities that include life insurance, general insurance cover, asset management, international insurance and banking.

This group has extended its activities in different European countries but achieves the majority of its profits in France.

To understand the presence and importance of AXA around the world, here are some important figures you should know.

In 2017, AXA had no less than 107 million customers around the world and only 9 million in France. This clearly demonstrates the strong presence of the French insurer on the international market.

In the labor market, AXA is also a key player, since the group currently employs around 120,000 people in different countries and has with more than 166,000 employees worldwide.

Finally, let's take a look at the profitability of AXA. In 2016, the group generated a turnover of more than 100 billion euros with a net profit of more than 5.6 billion euros.

Of course, these few figures are given to you as an indication and represent the situation as it is in 2017. They are therefore likely to change over time.

The Axa share price is currently quoted in the A section of the Euronext Paris stock market in France. The Axa Group share price is integrated in the calculation of the major French National stock market Index, the CAC 40.

Photo credits: Laurent Grassin - Flickr

The major competitors of AXA

We are now going to discover the environment in which the AXA Group operates with a presentation of its main competitors in this sector and their activities. Here are its major opponents at present:

Generali

First of all, the Assicurazioni Generali group, listed on the Bolsa Italiana, is an Italian insurance company which was created in 1831 in Tieste and is also one of the 50 most important companies in the world according to a ranking by Forbes. The group ranks third in the world in this sector just after Allianz and AXA. Currently, Generali serves 72 million customers worldwide and is particularly strong in the life insurance segment.

Zurich Insurance Group

This other company, better known as Zurich, is a Swiss insurance company based, as its name suggests, in Zurich. Zurich Insurance Group is also the largest insurance company in that country. It is also one of the largest companies in the world according to Forbes magazine, which ranks it 75th, as well as one of the largest international brands.

Aegon

Another major competitor to AXA is Aegon, which is listed on the Euronext Amsterdam market and is a Dutch insurance company. It operates in the Netherlands, the United States and the United Kingdom and currently employs around 23,000 people. The group currently has more than 30 million customers in some 20 different countries. Aegon is also one of the main shareholders of ING Group, with a 6.3% stake.

Allianz SE

This other company, founded in 1890 in Berlin, is a German insurance company and group. It is also the leading European insurer and the fourth largest asset manager in the world. The group specialises in property and casualty insurance and life insurance and operates in Germany, Switzerland, France and Italy. It also uses its network of insurance agents to market banking products.

AIG

Also among the largest players in the world insurance industry is the AIG Group, which is the trade name for the global property and casualty insurance network of American International Group Inc. AIG is thus one of the world's leading insurance and financial services companies. The company currently employs more than 56,000 people worldwide and serves more than 90 million customers in more than 100 countries and jurisdictions.

Aviva Plc

Finally, we will also follow the competitor Aviva, which is a British insurance company present in almost 14 countries around the world and is also one of the largest in this country. It is of course one of the leading European insurers along with AXA, Allianz and Generali with a strong presence in France and Germany in particular.

The major partners of AXA

In terms of Axa's partnerships, we must turn to the start-ups that are at the heart of the insurer's alliance strategy. Thus, Axa has recently linked up with Blablacar or Deliveroo in order to offer its services to young innovative companies.

Alibaba

Axa also signed a partnership with the Alibaba group in 2016 concerning the online distribution of its products.

ING Bank

In 2018, the AXA Group also set up a partnership with ING Bank in the digital field. This is an exclusive and long-term partnership that will allow AXA to offer online insurance products and related services in more than 6 countries. Thanks to this contract, ING will be able to diversify its sources of income by offering property and casualty insurance, health insurance and personal protection products in countries where it was only present in the online banking sector. This includes the French, German, Italian, Czech, Austrian and Australian markets. In total, no less than 13 million consumers are targeted by these new offers.

MACIF

More recently, in July 2019, the AXA Group did not create, but rather strengthened an existing partnership with Adie, an association working in the field of microcredit in France. The partnership, which began in 2007, has already enabled Adie to offer 3,000 micro-entrepreneurs micro-insurance policies tailored to their needs and activities.

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The factors in favour of a rise in the AXA share price:

Of course, one of the most persuasive arguments relating to a probability of a rising trend of the AXA share price concerns its position among the other European and international players in certain specific sectors of its activities. It should be remembered here that the AXA Group currently holds second position in the insurance sector in Europe and is the leader in life insurance worldwide. It is also the global leader in the wealth management sector. This position as leader has been rendered possible through the long term strategy practised by this group over the last three decades which essentially resides on the strategic acquisition of companies around the world. Nowadays this strong position offers the AXA Group a better visibility worldwide than the majority of its competitors and an almost total coverage of the different areas in this sector.

This in fact brings us to another positive argument for the future growth in this share price and relates this time to the distribution of this group’s activities into different sectors. It should be remembered here that the life and retirements savings solutions alone represent nearly 58% of this group’s activities. Then we find the damage insurance policies with 33% of the activities then international insurance and wealth management. The fact that these sectors are so separate and distinct means that AXA offers a better coverage for the market requirements and protects the company from risks related to a single type of product.

Apart from these arguments we should also mention the fact that the financial situation of this company appears particularly solid which strengthens the shareholders and investors feelings of security and encourages them to take buying positions in this company. This financial solidity is largely due to the centralised cash management system of the company which boasted a 191% solvency ratio in September 2016.

The AXA Group has for eight years concentrated its activities and investments in certain countries that have undergone strong growth and emerging countries which are now starting to bear fruit. Since 2010 AXA has in fact invested no less than 4.2 billion Euros in Asia and has thereby become leader in this sector. This company has also invested 0.7 billion Euros in the Mediterranean, Africa and Latin America as well as 200 million Euros in Eastern Europe. The current increase in growth in these geographical sectors should therefore continue to the benefit of AXA and generate even more revenue.

Another advantageous strategy of AXA relating to its development concerns its continuing responsiveness to the digital world. By using this type of communication and distribution channels the group shows itself to be more in touch with the general modern trend and thereby improves its brand image. In this way it is connected to a larger market and can therefore be more competitive against the competition. Still from a strategic point of view, in order to further improve its profitability and financial results AXA recently decided to concentrate on its unit linked technical products such as health, accidents and retirement that offer more advantageous margins and are less sensitive to variations and drops in the interest rates.

Generally speaking, if we compare the results published by AXA to those of the market in general, we can observe that the group is one of the only companies capable of generating profits, sometimes even record profits, in a negative environment with low true rates or highly volatile markets.

And finally the last argument for a rise in the AXA share price relates to the global confidence of the analysts and ratings agencies relating to this asset. The group benefits from an AA rating from a number of these agencies and the analysts agree with this positive rating which confirms the reliability and strong position of this asset.

The factors in favour of a drop in the AXA share price:

After reading the factors presented up to now you have no doubt reached the conclusion that the AXA Company is financially solid with an attractive strategy that should enable the company to continue increasing its activities and profits in the future. However stock market investors do not simply content themselves with an analysis of the group’s strengths, they also take into consideration the company’s weak points and the factors in favour of a drop in the company’s share price and this is what we shall now examine in detail.

Firstly, with the highly specific activity sector of the AXA Company we note that the capital structure is strongly sensitive to changes in the financial markets. This notably concerns the continuation of the weakness in current rates which are highly punishing for AXA’s guaranteed service rates as well as for the retention of life assurance margins and the shocking rise in the interest rates.

We also note a significant structural drop in the profitability of savings schemes for the majority of insurers including the AXA Company. Concerning the new savings accounts, the profitability and the margins of the insurers are currently operating close to zero which is a real problem over the long term.

The profitability of the AXA Group can also be negatively affected by certain events that incur serious losses. This notably concerns events such as bombings or climate catastrophes including floods that have increased in number over the last few years.

The fact of having to respond to the capital requirements of the GSII regulations presents another serious setback to the development of the AXA Company which at present still manages to satisfy their requirements.

And to conclude, the last argument in favour of a drop in the AXA share price relates to the lack of interest from investors for assets in this particular sector. In fact, since the financial crisis that severely affected Europe a few years ago, investors have displayed a certain wariness, even distrust regarding financial companies in this geographical area, including those of the insurance sector.

The information supplied here is only for indicative purposes and should not be used without the completion of a comprehensive and complete fundamental analysis of this asset notably taking into account exterior data, future publications and announcements and all fundamental events and news that could influence the strengths and weaknesses or make them more or less significant. This information does not in any way constitute recommendations relating to the completion of transactions or a solicitation to buy or sell an asset.

Frequently Asked Questions

In which stock market indices is the AXA share price present?

At this present time the AXA share price appears in the composition of three major stock market indices; the CAC 40, the SBF 120 and the Eurostoxx 50. But it is also to be found in a number of secondary stock market indices as follows: CAC All Shares, CAC All-Tradable, CAC Large 60, Euro Stoxx 50, Euronext 100, Euronext CDP Environment France EW, Euronext CDP Environment France Ex Oil, FTSE Eurotop 100, Low Carbon 100 Europe, PEA, Stoxx Europe 50, and the Stoxx France 50.

What are the key figures to know about the AXA share?

Axa currently has 107 million customers worldwide and employs over 116,514 people. AXA's latest financial results show a turnover of more than 99,931 million euros and a net profit of 2.98 million euros. AXA's market capitalisation in 2022 will be 60,087 million euros.

Does AXA pay a dividend to its shareholders?

Yes, AXA does pay a dividend to its shareholders and has done so since 1992 without interruption. The last known dividend is around €1.54 per share and was paid in 2022 for the year 2021. This dividend is paid once a year, with the ex-dividend date usually in May for the previous year's dividend.

How much do you have to spend to buy AXA shares?

The price of an AXA share varies according to supply and demand in the stock market. The price of a share is determined by investors who buy and sell shares on the financial markets based on their perception of the company's value. It is therefore impossible to give an exact price for the purchase of an AXA share, as the share price can fluctuate up or down at any time depending on various factors such as the company's financial results, market fluctuations, developments in the insurance industry, economic and political news, etc. In recent years, the AXA share price has averaged between €25 and €30, but of course the price can change. It is therefore important to check the share price on a real-time stock chart or with your online broker.

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Analysis before buying or selling AXA shares