Comparing Amerisafe (AMSF) & Arch Capital Group (ACGL)

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

Risk & Volatility

Amerisafe has a beta of 0.7, suggesting that its share price is 30% less volatile than the S&P 500. Comparatively, Arch Capital Group has a beta of 0.69, suggesting that its share price is 31% less volatile than the S&P 500.

Institutional and Insider Ownership

80.6% of Arch Capital Group shares are owned by institutional investors. 1.8% of Amerisafe shares are owned by insiders. Comparatively, 5.1% of Arch Capital Group shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Amerisafe and Arch Capital Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Amerisafe 0 2 4 0 2.67
Arch Capital Group 1 4 3 0 2.25

Amerisafe presently has a consensus price target of $65.67, indicating a potential upside of 8.97%. Arch Capital Group has a consensus price target of $18.17, indicating a potential downside of 33.21%. Given Amerisafe’s stronger consensus rating and higher probable upside, research analysts plainly believe Amerisafe is more favorable than Arch Capital Group.

Profitability

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

Net Margins Return on Equity Return on Assets
Amerisafe 13.35% 14.28% 4.15%
Arch Capital Group 10.47% 6.86% 1.90%

Earnings & Valuation

This table compares Amerisafe and Arch Capital Group’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Amerisafe $375.21 million 3.09 $46.23 million $3.08 19.56
Arch Capital Group $5.63 billion 1.96 $619.27 million $1.07 25.42

Arch Capital Group has higher revenue and earnings than Amerisafe. Amerisafe 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.

Dividends

Amerisafe pays an annual dividend of $0.88 per share and has a dividend yield of 1.5%. Arch Capital Group does not pay a dividend. Amerisafe pays out 28.6% of its earnings in the form of a dividend. Amerisafe has raised its dividend for 4 consecutive years.

Summary

Amerisafe beats Arch Capital Group on 11 of the 17 factors compared between the two stocks.

About Amerisafe

AMERISAFE, Inc., an insurance holding company, provides workers' compensation insurance in the United States. Its workers' compensation insurance policies provide benefits to injured employees for temporary or permanent disability, death, and medical and hospital expenses. The company serves small to mid-sized employers involved in construction, trucking, logging and lumber, manufacturing, agriculture, maritime, oil and gas, and other industries through agencies. AMERISAFE, Inc. was incorporated in 1985 and is based in DeRidder, Louisiana.

About Arch Capital Group

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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