Ambac Financial Group (NYSE:AMBC – Get Free Report) and RenaissanceRe (NYSE:RNR – Get Free Report) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their dividends, institutional ownership, profitability, earnings, analyst recommendations, valuation and risk.
Valuation & Earnings
This table compares Ambac Financial Group and RenaissanceRe”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Ambac Financial Group | $252.94 million | 1.50 | -$556.45 million | ($13.62) | -0.60 |
| RenaissanceRe | $12.10 billion | 1.01 | $1.87 billion | $35.99 | 7.40 |
Risk and Volatility
Ambac Financial Group has a beta of 0.96, suggesting that its stock price is 4% less volatile than the S&P 500. Comparatively, RenaissanceRe has a beta of 0.25, suggesting that its stock price is 75% less volatile than the S&P 500.
Analyst Ratings
This is a breakdown of current ratings and recommmendations for Ambac Financial Group and RenaissanceRe, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Ambac Financial Group | 1 | 0 | 1 | 0 | 2.00 |
| RenaissanceRe | 1 | 11 | 4 | 0 | 2.19 |
Ambac Financial Group presently has a consensus price target of $10.00, suggesting a potential upside of 22.35%. RenaissanceRe has a consensus price target of $283.67, suggesting a potential upside of 6.57%. Given Ambac Financial Group’s higher probable upside, equities analysts clearly believe Ambac Financial Group is more favorable than RenaissanceRe.
Insider & Institutional Ownership
84.5% of Ambac Financial Group shares are owned by institutional investors. Comparatively, 100.0% of RenaissanceRe shares are owned by institutional investors. 6.2% of Ambac Financial Group shares are owned by insiders. Comparatively, 1.3% of RenaissanceRe shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Profitability
This table compares Ambac Financial Group and RenaissanceRe’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Ambac Financial Group | -215.40% | -3.50% | -0.49% |
| RenaissanceRe | 14.23% | 16.83% | 3.17% |
Summary
RenaissanceRe beats Ambac Financial Group on 10 of the 14 factors compared between the two stocks.
About Ambac Financial 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.
About RenaissanceRe
RenaissanceRe Holdings Ltd., together with its subsidiaries, provides reinsurance and insurance products in the United States and internationally. The company operates through Property, and Casualty and Specialty segments. The Property segment writes property catastrophe excess of loss reinsurance and excess of loss reinsurance to insure insurance and reinsurance companies against natural and man-made catastrophes, including hurricanes, earthquakes, typhoons, and tsunamis, as well as winter storms, freezes, floods, fires, windstorms, tornadoes, explosions, and acts of terrorism; and other property class of products, such as proportional reinsurance, property per risk, property reinsurance, binding facilities, and regional U.S. multi-line reinsurance. The Casualty and Specialty segment writes various classes of products, such as directors and officers, medical malpractice, and professional indemnity; automobile and employer’s liability, casualty clash, umbrella or excess casualty, workers’ compensation, and general liability; financial and mortgage guaranty, political risk, surety, and trade credit; and accident and health, agriculture, aviation, cyber, energy, marine, satellite, and terrorism. It distributes products and services primarily through intermediaries. The company invests in and manages funds. RenaissanceRe Holdings Ltd. was founded in 1993 and is headquartered in Pembroke, Bermuda.
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