Arch Capital Group (NASDAQ:ACGL – Get Free Report) and Octave Specialty Group (NYSE:OSG – Get Free Report) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, profitability, earnings, valuation, analyst recommendations, risk and institutional ownership.
Profitability
This table compares Arch Capital Group and Octave Specialty Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Arch Capital Group | 24.64% | 17.61% | 5.08% |
| Octave Specialty Group | -75.91% | -0.55% | -0.13% |
Analyst Ratings
This is a summary of current recommendations and price targets for Arch Capital Group and Octave Specialty Group, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Arch Capital Group | 1 | 7 | 8 | 0 | 2.44 |
| Octave Specialty Group | 1 | 1 | 1 | 1 | 2.50 |
Earnings & Valuation
This table compares Arch Capital Group and Octave Specialty Group”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Arch Capital Group | $19.93 billion | 1.61 | $4.40 billion | $13.02 | 7.04 |
| Octave Specialty Group | $251.22 million | 1.01 | -$261.69 million | ($4.86) | -1.16 |
Arch Capital Group has higher revenue and earnings than Octave Specialty Group. Octave Specialty Group 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.
Volatility & Risk
Arch Capital Group has a beta of 0.32, indicating that its share price is 68% less volatile than the S&P 500. Comparatively, Octave Specialty Group has a beta of 0.86, indicating that its share price is 14% less volatile than the S&P 500.
Institutional and Insider Ownership
89.1% of Arch Capital Group shares are held by institutional investors. Comparatively, 80.9% of Octave Specialty Group shares are held by institutional investors. 3.3% of Arch Capital Group shares are held by company insiders. Comparatively, 7.2% of Octave Specialty Group shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Summary
Arch Capital Group beats Octave Specialty Group on 10 of the 15 factors compared between the two stocks.
About Arch Capital Group
Arch Capital Group Ltd., together with its subsidiaries, provides insurance, reinsurance, and mortgage insurance products worldwide. The company's Insurance segment offers primary and excess casualty coverages; loss sensitive primary casualty insurance programs; 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; employer's liability; contract and commercial surety coverages; and collateral protection, debt cancellation, and service contract reimbursement products. This segment markets its products through a group of licensed independent retail and wholesale brokers. Its Reinsurance segment provides casualty reinsurance for third party liability exposures; marine and aviation; motor reinsurance, whole account multi-line treaties, cyber, trade credit, surety, accident and health, workers' compensation catastrophe, agriculture, trade credit, and political risk products; reinsurance protection for catastrophic losses, and personal lines and commercial property exposures; life reinsurance; casualty clash; and risk management solutions. This segment markets its reinsurance products through brokers. The company's Mortgage segment offers direct mortgage insurance and mortgage reinsurance. The company was founded in 1995 and is based in Pembroke, Bermuda.
About Octave Specialty Group
Ambac Financial Group, Inc. operates as a financial services holding company. It operates three businesses: Specialty Property and Casualty Insurance, Insurance Distribution, and Legacy Financial Guarantee (LFG) Insurance. The Specialty Property and Casualty Insurance business provides specialty property and casualty program insurance with a focus commercial and personal liability risks. The Insurance Distribution business includes the specialty property and casualty insurance distribution business, which includes managing general agents and underwriters, insurance wholesalers, brokers, and other distribution businesses. The LFG Insurance business offers financial guarantee insurance policies that provide an unconditional and irrevocable guarantee, which protects the holder of a debt obligation against non-payment when due of the principal and interest on the obligations guaranteed. Ambac Financial Group, Inc. was incorporated in 1991 and is headquartered in New York, New York.
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