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

Insider and Institutional Ownership

96.8% of Assured Guaranty shares are owned by institutional investors. 2.6% of Assured Guaranty shares are owned 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.

Valuation and Earnings

This table compares HCI Group and Assured Guaranty’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
HCI Group N/A N/A N/A N/A N/A
Assured Guaranty $1.54 billion 3.30 $1.05 billion $8.82 4.84

Assured Guaranty has higher revenue and earnings than HCI Group.

Profitability

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

Net Margins Return on Equity Return on Assets
HCI Group 14.08% 15.29% 4.84%
Assured Guaranty 61.25% 16.00% 7.30%

Analyst Recommendations

This is a summary of recent ratings and target prices for HCI Group and Assured Guaranty, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
HCI Group 0 0 0 0 N/A
Assured Guaranty 0 1 2 0 2.67

Assured Guaranty has a consensus target price of $47.00, suggesting a potential upside of 9.99%. Given Assured Guaranty’s higher possible upside, analysts plainly believe Assured Guaranty is more favorable than HCI Group.

Dividends

Assured Guaranty pays an annual dividend of $0.57 per share and has a dividend yield of 1.3%. HCI Group does not pay a dividend. Assured Guaranty pays out 6.5% of its earnings in the form of a dividend. HCI Group has increased its dividend for 5 consecutive years.

Summary

Assured Guaranty beats HCI Group on 9 of the 11 factors compared between the two stocks.

HCI Group Company Profile

HCI Group, Inc. (HCI) is an insurance holding company. The Company operates through four operating divisions: property and casualty insurance, reinsurance, investment real estate and information technology. Its operations include Insurance Operations and Other Operations. Its Insurance Operations include property and casualty insurance, and reinsurance. The Company, through its subsidiary, Homeowners Choice Property & Casualty Insurance Company, Inc. (HCPCI), provides property and casualty insurance to homeowners, condominium owners and tenants on properties located in Florida. HCPCI also offers flood-endorsed and wind-only policies to new and pre-existing Florida customers. Its Other Operations include information technology (IT) and real estate. The Company’s real estate operations consist of multiple properties it owns and operates.

Assured Guaranty Company Profile

Assured Guaranty Ltd. is a holding company. The Company, through its subsidiaries, provides credit protection products to the United States and international public finance, including infrastructure, and structured finance markets. It applies its credit underwriting judgment, risk management skills and capital markets experience primarily to offer financial guaranty insurance that protects holders of debt instruments and other monetary obligations from defaults in scheduled payments. 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. It guarantees obligations issued principally in the United States and the United Kingdom and also guarantees obligations issued in other countries and regions, including Australia and Western Europe. It also provides other forms of insurance that are in line with its risk profile and benefit from its underwriting experience.

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