Greenlight Capital Re (NASDAQ:GLRE) and Assured Guaranty (NYSE:AGO) Financial Review

Greenlight Capital Re (NASDAQ:GLRE) and Assured Guaranty (NYSE:AGO) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their dividends, profitability, risk, analyst recommendations, valuation, earnings and institutional ownership.

Institutional and Insider Ownership

41.5% of Greenlight Capital Re shares are held by institutional investors. Comparatively, 92.2% of Assured Guaranty shares are held by institutional investors. 24.7% of Greenlight Capital Re shares are held by company insiders. Comparatively, 5.7% of Assured Guaranty shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings for Greenlight Capital Re and Assured Guaranty, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Greenlight Capital Re	0	2	0	0	2.00
Assured Guaranty	0	3	2	0	2.40

Assured Guaranty has a consensus price target of $89.33, suggesting a potential upside of 25.95%. Given Assured Guaranty’s stronger consensus rating and higher probable upside, analysts plainly believe Assured Guaranty is more favorable than Greenlight Capital Re.

Earnings and Valuation

This table compares Greenlight Capital Re and Assured Guaranty”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Greenlight Capital Re	$729.78 million	0.68	$74.83 million	$1.47	10.38
Assured Guaranty	$1.11 billion	2.81	$503.00 million	$7.50	9.46

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Greenlight Capital Re	7.47%	7.28%	2.32%
Assured Guaranty	37.34%	7.11%	3.25%

Volatility and Risk

Greenlight Capital Re has a beta of 0.32, meaning that its share price is 68% less volatile than the S&P 500. Comparatively, Assured Guaranty has a beta of 0.73, meaning that its share price is 27% less volatile than the S&P 500.

Summary

Assured Guaranty beats Greenlight Capital Re on 11 of the 14 factors compared between the two stocks.

About Greenlight Capital Re

Greenlight Capital Re, Ltd., through its subsidiaries, operates as a property and casualty reinsurance company worldwide. The company offers various property reinsurance products and services, including automobile physical damage, personal lines, and commercial lines. It also provides casualty reinsurance products and services comprising general liability, motor liability, professional liability, and worker's compensation; and accident and health, transactional liability, mortgage insurance, surety, trade credit, marine, and energy, as well as other specialty products, such as aviation, crop, cyber, political, and terrorism products. The company markets its products through reinsurance brokers. Greenlight Capital Re, Ltd. was incorporated in 2004 and is headquartered in Grand Cayman, the Cayman Islands.

About Assured Guaranty

Assured Guaranty Ltd., together with its subsidiaries, provides credit protection products to public finance, infrastructure, and structured finance markets in the United States and internationally. It operates through two segments: Insurance and Asset Management. The company offers financial guaranty insurance that protects holders of debt instruments and other monetary obligations from defaults in scheduled payments. It insures and reinsures various debt obligations, including bonds issued by the United States state governmental authorities; and notes issued to finance infrastructure projects. In addition, the company insures and reinsures various the U.S. public finance obligations, such as general obligation, tax-backed, municipal utility, transportation, healthcare, higher education, infrastructure, housing revenue, investor-owned utility, renewable energy, and other public finance bonds. Further, the company involved in insuring and reinsuring of non-U.S. public finance obligations comprising regulated utilities, infrastructure finance, sovereign and sub-sovereign, renewable energy bonds, pooled infrastructure, and other public finance obligations; and the U.S. and non-U.S. Structured finance obligations, including residential mortgage-backed securities, life insurance transactions, consumer receivables securities, subscription finance facilities, pooled corporate obligations, and financial products. Additionally, it offers specialty business, such as real estate properties, insurance securitizations, and aircraft residual value insurance (RVI) transactions; and asset management services comprising investment advisory services. 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 incorporated in 2003 and is headquartered in Hamilton, Bermuda.