Analyzing Arch Capital Group (NASDAQ:ACGL) and Presurance (NASDAQ:PRHI)

Presurance (NASDAQ:PRHI) and Arch Capital Group (NASDAQ:ACGL) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, earnings, risk, analyst recommendations and valuation.

Profitability

This table compares Presurance and Arch Capital Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Presurance	-49.56%	-89.12%	-7.90%
Arch Capital Group	24.40%	17.06%	4.87%

Institutional & Insider Ownership

34.9% of Presurance shares are owned by institutional investors. Comparatively, 89.1% of Arch Capital Group shares are owned by institutional investors. 73.3% of Presurance shares are owned by company insiders. Comparatively, 3.3% of Arch Capital Group shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and target prices for Presurance and Arch Capital Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Presurance	1	0	0	0	1.00
Arch Capital Group	1	7	6	0	2.36

Presurance currently has a consensus target price of $7.00, suggesting a potential upside of 2.04%. Arch Capital Group has a consensus target price of $110.82, suggesting a potential upside of 18.40%. Given Arch Capital Group’s stronger consensus rating and higher probable upside, analysts clearly believe Arch Capital Group is more favorable than Presurance.

Risk and Volatility

Presurance has a beta of 0.87, suggesting that its share price is 13% less volatile than the S&P 500. Comparatively, Arch Capital Group has a beta of 0.28, suggesting that its share price is 72% less volatile than the S&P 500.

Valuation & Earnings

This table compares Presurance and Arch Capital Group”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Presurance	$43.30 million	0.59	-$18.44 million	($10.24)	-0.67
Arch Capital Group	$18.59 billion	1.72	$4.40 billion	$12.79	7.32

Arch Capital Group has higher revenue and earnings than Presurance. Presurance is trading at a lower price-to-earnings ratio than Arch Capital Group, indicating that it is currently the more affordable of the two stocks.

Summary

Arch Capital Group beats Presurance on 12 of the 14 factors compared between the two stocks.

About Presurance

Conifer Holdings, Inc., an insurance holding company, engages in the sale of property and casualty insurance products. It offers insurance coverage in specialty commercial and personal product lines. The company underwrites various specialty insurance products, including property, general liability, liquor liability, automobile, and homeowners and dwelling policies. It serves the commercial insurance needs of owner-operated businesses in the markets, such as hospitality, which includes restaurants, bars, taverns, and bowling centers, as well as small grocery and convenience stores; artisan contractors comprising plumbers, painters, carpenters, electricians, and other independent contractors; and security service providers, including companies that provide security guard services, security alarm products and services, and private investigative services. The company also offers specialty homeowners insurance products, such as low- value dwelling insurance tailored for owners of lower valued homes in Illinois, Indiana, Louisiana, and Texas; and wholesale agency services comprising commercial and personal lines insurance products for its insurance company subsidiaries, as well as third party insurers. Conifer Holdings, Inc. markets and sells its insurance products through a network of approximately 4,600 independent agents in 50 states in the United States. The company was incorporated in 2009 and is headquartered in Birmingham, Michigan.

About Arch Capital Group

Arch Capital Group Ltd., together with its subsidiaries, provides insurance, reinsurance, and mortgage insurance products worldwide. The company's Insurance segment offers primary and excess casualty coverages; loss sensitive primary casualty insurance programs; directors' and officers' liability, errors and omissions liability, employment practices and fiduciary liability, crime, professional indemnity, and other financial related coverages; medical professional and general liability insurance coverages; and workers' compensation and umbrella liability, as well as commercial automobile and inland marine products. It also provides property, energy, marine, and aviation insurance; travel insurance; accident, disability, and medical plan insurance coverages; captive insurance programs; employer's liability; contract and commercial surety coverages; and collateral protection, debt cancellation, and service contract reimbursement products. This segment markets its products through a group of licensed independent retail and wholesale brokers. Its Reinsurance segment provides casualty reinsurance for third party liability exposures; marine and aviation; motor reinsurance, whole account multi-line treaties, cyber, trade credit, surety, accident and health, workers' compensation catastrophe, agriculture, trade credit, and political risk products; reinsurance protection for catastrophic losses, and personal lines and commercial property exposures; life reinsurance; casualty clash; and risk management solutions. This segment markets its reinsurance products through brokers. The company's Mortgage segment offers direct mortgage insurance and mortgage reinsurance. The company was founded in 1995 and is based in Pembroke, Bermuda.