Arch Capital Group (NASDAQ: ACGL) and Argo Group International (NASDAQ:AGII) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, profitability, risk, institutional ownership, earnings, dividends and analyst recommendations.
Institutional & Insider Ownership
79.4% of Arch Capital Group shares are owned by institutional investors. Comparatively, 86.9% of Argo Group International shares are owned by institutional investors. 6.6% of Arch Capital Group shares are owned by company insiders. Comparatively, 4.9% of Argo Group International shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Arch Capital Group has a beta of 0.67, suggesting that its share price is 33% less volatile than the S&P 500. Comparatively, Argo Group International has a beta of 0.82, suggesting that its share price is 18% less volatile than the S&P 500.
Earnings & Valuation
This table compares Arch Capital Group and Argo Group International’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Arch Capital Group||$4.39 billion||2.70||$692.73 million||$3.10||29.25|
|Argo Group International||$1.58 billion||1.16||$146.70 million||$1.70||36.09|
Arch Capital Group has higher revenue and earnings than Argo Group International. Arch Capital Group is trading at a lower price-to-earnings ratio than Argo Group International, indicating that it is currently the more affordable of the two stocks.
This is a summary of current ratings and target prices for Arch Capital Group and Argo Group International, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Arch Capital Group||0||6||4||0||2.40|
|Argo Group International||1||0||1||0||2.00|
Arch Capital Group presently has a consensus target price of $99.33, suggesting a potential upside of 9.53%. Argo Group International has a consensus target price of $71.00, suggesting a potential upside of 15.73%. Given Argo Group International’s higher probable upside, analysts clearly believe Argo Group International is more favorable than Arch Capital Group.
Argo Group International pays an annual dividend of $1.08 per share and has a dividend yield of 1.8%. Arch Capital Group does not pay a dividend. Argo Group International pays out 63.5% of its earnings in the form of a dividend.
This table compares Arch Capital Group and Argo Group International’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Arch Capital Group||9.44%||5.57%||1.44%|
|Argo Group International||3.15%||1.36%||0.31%|
Arch Capital Group beats Argo Group International on 11 of the 16 factors compared between the two stocks.
About Arch Capital Group
Arch Capital Group Ltd. provides insurance, reinsurance and mortgage insurance. The Company provides a range of property, casualty and mortgage insurance and reinsurance lines. The Company operates in five segments: insurance, reinsurance, mortgage, other and corporate. The insurance segment’s product lines include construction and national accounts; excess and surplus casualty; lenders products; professional lines; programs; property, energy, marine and aviation; travel, accident and health, and other. The reinsurance segment’s product lines include casualty; marine and aviation; other specialty; property catastrophe; property excluding property catastrophe, and other. The mortgage segment includes the results of Arch Mortgage Insurance Company and Arch Mortgage Insurance Designated Activity Company, which are providers of mortgage insurance products and services to the United States and European markets. The other segment includes the results of Watford Holdings Ltd.
About Argo Group International
Argo Group International Holdings, Ltd. is an underwriter of specialty insurance and reinsurance products in the property and casualty market. The Company operates through four segments: Excess and Surplus Lines, Commercial Specialty, International Specialty and Syndicate 1200. Excess and Surplus Lines segment carriers focus on risks that the standard (admitted) market is unwilling or unable to underwrite. The Excess and Surplus Lines segment consists of two operating platforms: Colony Specialty and Argo Pro. Commercial Specialty segment provides property, casualty and surety coverages designed to meet the insurance needs of businesses within certain markets. International Specialty segment underwrites insurance and reinsurance risks. It operate as Argo Re, the Casualty and Professional Lines unit of Argo Insurance in Bermuda, and Argo Seguros Brazil, S.A. in Brazil. The Syndicate 1200 segment underwrites around the world property, specialty and non-United States liability insurance.
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