Financial Analysis: Assured Guaranty (NYSE:AGO) & Scor (OTCMKTS:SCRYY)

Assured Guaranty (NYSE:AGO) and Scor (OTCMKTS:SCRYY) are both mid-cap finance companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, profitability, institutional ownership, earnings, dividends, risk and analyst recommendations.

Dividends

Assured Guaranty pays an annual dividend of $1.36 per share and has a dividend yield of 1.5%. Scor pays an annual dividend of $0.13 per share and has a dividend yield of 4.0%. Assured Guaranty pays out 16.9% of its earnings in the form of a dividend. Scor pays out 24.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Assured Guaranty has increased its dividend for 7 consecutive years.

Valuation & Earnings

This table compares Assured Guaranty and Scor”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Assured Guaranty	$872.00 million	4.83	$376.00 million	$8.06	11.32
Scor	$17.45 billion	0.33	$4.33 million	$0.54	5.97

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Assured Guaranty	40.65%	7.09%	3.35%
Scor	5.63%	20.01%	2.37%

Volatility and Risk

Assured Guaranty has a beta of 0.91, suggesting that its share price is 9% less volatile than the S&P 500. Comparatively, Scor has a beta of 0.58, suggesting that its share price is 42% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and target prices for Assured Guaranty and Scor, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Assured Guaranty	0	2	2	0	2.50
Scor	0	2	2	2	3.00

Assured Guaranty presently has a consensus target price of $101.00, suggesting a potential upside of 10.68%. Given Assured Guaranty’s higher probable upside, analysts clearly believe Assured Guaranty is more favorable than Scor.

Institutional and Insider Ownership

92.2% of Assured Guaranty shares are owned by institutional investors. 5.1% of Assured Guaranty shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Assured Guaranty beats Scor on 12 of the 17 factors compared between the two stocks.

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.

About Scor

SCOR SE, together with its subsidiaries, provides life and non-life reinsurance products in Europe, the Middle East, Africa, the Americas, Latin America, and Asia Pacific. It operates in two segments, SCOR P&C and SCOR L&H. The SCOR P&C segment offers reinsurance products in the areas of property, motors, casualty treaties, credit and surety, decennial insurance, aviation, marine and energy, engineering, agricultural risks, and property catastrophes; specialties insurance products, including business solutions, political and credit risks, cyber, and environmental liability; and business ventures and partnerships. The SCOR L&H segment provides life reinsurance products, such as protection for mortality, morbidity, behavioral risks, disability, long-term care, critical illness, medical, and personal accident. This segment also provides financial solutions that combine traditional life reinsurance with financial components and provide liquidity, balance sheet, solvency, and income improvements to clients; longevity solutions that include products covering the risk of negative deviation from expected results due to the insured or annuitant living longer than assumed in the pricing of insurance covers provided by insurers or pension funds; and distribution solutions. In addition, it is involved in the asset management business. SCOR SE was founded in 1970 and is headquartered in Paris, France.