Assured Guaranty (NYSE:AGO – Get Free Report) and James River Group (NASDAQ:JRVR – Get Free Report) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their dividends, earnings, analyst recommendations, risk, profitability, valuation and institutional ownership.
Institutional and Insider Ownership
92.2% of Assured Guaranty shares are held by institutional investors. Comparatively, 95.2% of James River Group shares are held by institutional investors. 5.1% of Assured Guaranty shares are held by company insiders. Comparatively, 33.8% of James River Group shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Analyst Recommendations
This is a summary of recent recommendations and price targets for Assured Guaranty and James River Group, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Assured Guaranty | 0 | 2 | 2 | 0 | 2.50 |
| James River Group | 1 | 5 | 1 | 0 | 2.00 |
Risk & Volatility
Assured Guaranty has a beta of 0.94, meaning that its share price is 6% less volatile than the S&P 500. Comparatively, James River Group has a beta of -0.04, meaning that its share price is 104% less volatile than the S&P 500.
Profitability
This table compares Assured Guaranty and James River Group’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% |
| James River Group | -7.64% | 7.11% | 0.69% |
Dividends
Assured Guaranty pays an annual dividend of $1.36 per share and has a dividend yield of 1.6%. James River Group pays an annual dividend of $0.04 per share and has a dividend yield of 0.6%. Assured Guaranty pays out 16.9% of its earnings in the form of a dividend. James River Group pays out -1.9% 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. Assured Guaranty is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation and Earnings
This table compares Assured Guaranty and James River Group”s gross 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 | 4.63 | $376.00 million | $8.06 | 10.86 |
| James River Group | $707.63 million | 0.45 | -$81.12 million | ($2.08) | -3.34 |
Assured Guaranty has higher revenue and earnings than James River Group. James River Group is trading at a lower price-to-earnings ratio than Assured Guaranty, indicating that it is currently the more affordable of the two stocks.
Summary
Assured Guaranty beats James River Group on 13 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 James River Group
James River Group Holdings, Ltd., through its subsidiaries, provides specialty insurance services. It operates through Excess and Surplus Lines, and Specialty Admitted Insurance segments. The Excess and Surplus Lines segment underwrites liability and property insurance in the United States Puerto Rice, and the United States Virgin Islands. This segment distributes its insurance policies primarily through wholesale insurance brokers. The Specialty Admitted Insurance segment provides insurance for fronting, program administrators, managing general agents, and independent retail agents. James River Group Holdings, Ltd. was founded in 2002 and is headquartered in Pembroke, Bermuda.
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