NMI (NMIH) & Assured Guaranty (AGO) Head-To-Head Analysis

NMI (NASDAQ: NMIH) and Assured Guaranty (NYSE:AGO) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, risk, earnings, valuation, institutional ownership and dividends.

Dividends

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Assured Guaranty pays an annual dividend of $0.64 per share and has a dividend yield of 1.7%. NMI does not pay a dividend. Assured Guaranty has raised its dividend for 6 consecutive years.

Earnings and Valuation

This table compares NMI and Assured Guaranty’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
NMI $182.74 million 5.19 $22.05 million $0.57 25.53
Assured Guaranty $1.74 billion 2.47 $730.00 million N/A N/A

Assured Guaranty has higher revenue and earnings than NMI.

Volatility & Risk

NMI has a beta of 0.88, indicating that its stock price is 12% less volatile than the S&P 500. Comparatively, Assured Guaranty has a beta of 1.3, indicating that its stock price is 30% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for NMI and Assured Guaranty, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NMI 0 0 7 0 3.00
Assured Guaranty 0 0 4 0 3.00

NMI currently has a consensus price target of $20.71, indicating a potential upside of 42.37%. Assured Guaranty has a consensus price target of $48.00, indicating a potential upside of 28.86%. Given NMI’s higher possible upside, equities research analysts clearly believe NMI is more favorable than Assured Guaranty.

Profitability

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

Net Margins Return on Equity Return on Assets
NMI 12.07% 7.89% 4.53%
Assured Guaranty 41.98% 9.76% 4.53%

Institutional & Insider Ownership

83.9% of NMI shares are held by institutional investors. Comparatively, 97.8% of Assured Guaranty shares are held by institutional investors. 5.7% of NMI shares are held by company insiders. Comparatively, 2.5% of Assured Guaranty shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Assured Guaranty beats NMI on 8 of the 13 factors compared between the two stocks.

About NMI

NMI Holdings, Inc., through its subsidiaries, provides private mortgage guaranty insurance services in the United States. The company offers mortgage insurance; reinsurance on loans; and outsourced loan review services to mortgage loan originators. It serves national and regional mortgage banks, money center banks, credit unions, community banks, builder-owned mortgage lenders, Internet-sourced lenders, and other non-bank lenders. The company was founded in 2011 and is headquartered in Emeryville, California.

About Assured Guaranty

Assured Guaranty Ltd., through its subsidiaries, provides credit protection products to public finance, infrastructure, and structured finance markets in the United States and internationally. It offers financial guaranty insurance that protects holders of debt instruments and other monetary obligations from defaults in scheduled payments. The company insures various debt obligations, including bonds issued by the United States state or municipal governmental authorities; and notes issued to finance infrastructure projects. It also insures and reinsures various types of the United States public finance obligations, such as general obligation, tax-backed, municipal utility, transportation, healthcare, higher education, infrastructure, housing revenue, investor-owned utility, and other public finance bonds; and various types of non-United States public finance obligations comprising infrastructure finance, regulated utilities, pooled infrastructure, and other public finance obligations. In addition, the company insures and reinsures various types of the United States and non-United States structured finance obligations, including pooled corporate obligations, residential mortgage-backed securities, insurance securitization obligations, consumer receivables securities, financial products, commercial receivables securities, commercial mortgage-backed securities, and other structured finance securities. 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 founded in 2003 and is headquartered in Hamilton, Bermuda.

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