Financial Contrast: Assured Guaranty (NYSE:AGO) & Genworth Financial (NYSE:GNW)

Assured Guaranty (NYSE:AGO) and Genworth Financial (NYSE:GNW) are both mid-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, earnings, valuation, dividends, profitability, risk and analyst recommendations.

Institutional & Insider Ownership

92.2% of Assured Guaranty shares are owned by institutional investors. Comparatively, 81.8% of Genworth Financial shares are owned by institutional investors. 5.7% of Assured Guaranty shares are owned by company insiders. Comparatively, 1.8% of Genworth Financial shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings and price targets for Assured Guaranty and Genworth Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Assured Guaranty	0	2	3	0	2.60
Genworth Financial	0	1	2	0	2.67

Assured Guaranty currently has a consensus target price of $91.00, suggesting a potential upside of 33.08%. Genworth Financial has a consensus target price of $11.50, suggesting a potential upside of 20.61%. Given Assured Guaranty’s higher possible upside, equities analysts clearly believe Assured Guaranty is more favorable than Genworth Financial.

Volatility and Risk

Assured Guaranty has a beta of 0.73, indicating that its share price is 27% less volatile than the S&P 500. Comparatively, Genworth Financial has a beta of 0.88, indicating that its share price is 12% less volatile than the S&P 500.

Profitability

This table compares Assured Guaranty and Genworth Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Assured Guaranty	37.34%	7.11%	3.25%
Genworth Financial	2.87%	1.06%	0.12%

Valuation and Earnings

This table compares Assured Guaranty and Genworth Financial”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Assured Guaranty	$1.11 billion	2.71	$503.00 million	$7.50	9.12
Genworth Financial	$7.30 billion	0.49	$223.00 million	$0.52	18.34

Assured Guaranty has higher earnings, but lower revenue than Genworth Financial. Assured Guaranty is trading at a lower price-to-earnings ratio than Genworth Financial, indicating that it is currently the more affordable of the two stocks.

Summary

Assured Guaranty beats Genworth Financial on 10 of the 14 factors compared between the two stocks.

About Assured Guaranty

Assured Guaranty Ltd., together with its subsidiaries, provides credit protection products to public finance, infrastructure, and structured finance markets in the United States and internationally. It operates through two segments: Insurance and Asset Management. The company offers financial guaranty insurance that protects holders of debt instruments and other monetary obligations from defaults in scheduled payments. It insures and reinsures various debt obligations, including bonds issued by the United States state governmental authorities; and notes issued to finance infrastructure projects. In addition, the company insures and reinsures various the U.S. public finance obligations, such as general obligation, tax-backed, municipal utility, transportation, healthcare, higher education, infrastructure, housing revenue, investor-owned utility, renewable energy, and other public finance bonds. Further, the company involved in insuring and reinsuring of non-U.S. public finance obligations comprising regulated utilities, infrastructure finance, sovereign and sub-sovereign, renewable energy bonds, pooled infrastructure, and other public finance obligations; and the U.S. and non-U.S. Structured finance obligations, including residential mortgage-backed securities, life insurance transactions, consumer receivables securities, subscription finance facilities, pooled corporate obligations, and financial products. Additionally, it offers specialty business, such as real estate properties, insurance securitizations, and aircraft residual value insurance (RVI) transactions; and asset management services comprising investment advisory services. It markets its financial guaranty insurance directly to issuers and underwriters of public finance and structured finance securities, as well as to investors in such obligations. Assured Guaranty Ltd. was incorporated in 2003 and is headquartered in Hamilton, Bermuda.

About Genworth Financial

Genworth Financial, Inc., together with its subsidiaries, provides mortgage and long-term care insurance products in the United States and internationally. It operates in three segments: Enact, Long-Term Care Insurance, and Life and Annuities. The Enact segment offers private mortgage insurance products primarily insuring prime-based, individually underwritten residential mortgage loans; and pool mortgage insurance products. The Long-Term Care Insurance segment offers long-term care insurance products that are intended to protect against the significant and escalating costs of long-term care services provided in the insured's home, assisted living, and nursing facilities. The Life and Annuities segment provides protection and retirement income products, that includes traditional and non-traditional life insurance, such as term, universal and term universal life insurance, corporate-owned life insurance, and funding agreements; fixed annuities; and variable annuities. It distributes its products through sales force, in-house sales representatives, and digital marketing programs. The company was founded in 1871 and is headquartered in Richmond, Virginia.