Third Point Reinsurance (NASDAQ: ACGL) and Arch Capital Group (NASDAQ:ACGL) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, earnings, institutional ownership and dividends.
Risk & Volatility
Third Point Reinsurance has a beta of 1.1, suggesting that its stock price is 10% more volatile than the S&P 500. Comparatively, Arch Capital Group has a beta of 0.69, suggesting that its stock price is 31% less volatile than the S&P 500.
This table compares Third Point Reinsurance and Arch Capital Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Third Point Reinsurance||13.15%||5.66%||1.96%|
|Arch Capital Group||10.47%||6.86%||1.90%|
Earnings & Valuation
This table compares Third Point Reinsurance and Arch Capital Group’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Third Point Reinsurance||$939.01 million||1.40||$277.79 million||$2.63||5.02|
|Arch Capital Group||$5.63 billion||2.21||$619.27 million||$1.07||28.63|
Arch Capital Group has higher revenue and earnings than Third Point Reinsurance. Third Point Reinsurance 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.
This is a breakdown of recent ratings and recommmendations for Third Point Reinsurance and Arch Capital Group, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Third Point Reinsurance||0||1||2||0||2.67|
|Arch Capital Group||1||4||4||0||2.33|
Third Point Reinsurance currently has a consensus price target of $17.67, suggesting a potential upside of 33.84%. Arch Capital Group has a consensus price target of $16.63, suggesting a potential downside of 45.72%. Given Third Point Reinsurance’s stronger consensus rating and higher possible upside, analysts plainly believe Third Point Reinsurance is more favorable than Arch Capital Group.
Institutional & Insider Ownership
74.2% of Third Point Reinsurance shares are owned by institutional investors. Comparatively, 31.2% of Arch Capital Group shares are owned by institutional investors. 12.1% of Third Point Reinsurance shares are owned by company insiders. Comparatively, 5.1% of Arch Capital Group shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Third Point Reinsurance beats Arch Capital Group on 8 of the 14 factors compared between the two stocks.
Third Point Reinsurance Company Profile
Third Point Reinsurance Ltd., through its subsidiaries, provides specialty property and casualty reinsurance products to insurance and reinsurance companies worldwide. It underwrites homeowners, workers compensation, personal automobile, mortgage, and multi-line reinsurance; professional, transactional, and general liability reinsurance; and marine, travel, and extended warranty reinsurance products. The company was incorporated in 2011 and is based in Pembroke, Bermuda.
Arch Capital Group Company Profile
Arch Capital Group Ltd., together with its subsidiaries, provides property, casualty, and mortgage insurance and reinsurance products worldwide. The company's Insurance segment offers primary and excess casualty coverages; loss sensitive primary casualty insurance programs; collateral protection, debt cancellation, and service contract reimbursement products; 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; employers' liability insurance coverages; and contract and commercial surety coverages. This segment markets its products through a group of licensed independent retail and wholesale brokers. Its Reinsurance segment provides reinsurance for third party liability and workers' compensation exposures; marine and aviation reinsurance; surety, accident and health, workers' compensation catastrophe, agriculture, trade credit, and political risk products; reinsurance protection for catastrophic losses and commercial property risks; life reinsurance; casualty clash; and risk management solutions. This segment markets its reinsurance products through brokers, and directly to ceding companies. The company's Mortgage segment offers private mortgage insurance covering one-to-four family residential mortgages; mortgage insurance to cover previously originated residential loans; quota share reinsurance; and risk-sharing products. This segment sells its products through direct basis and through brokers to mortgage originators. The company was founded in 1995 and is based in Pembroke, Bermuda.
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