First Acceptance (OTCMKTS:FACO) versus Ambac Financial Group (NYSE:AMBC) Head to Head Comparison

First Acceptance (OTCMKTS:FACO) and Ambac Financial Group (NYSE:AMBC) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, analyst recommendations, risk, valuation, earnings and dividends.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for First Acceptance and Ambac Financial Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Acceptance	0	0	0	0	0.00
Ambac Financial Group	1	0	1	0	2.00

Ambac Financial Group has a consensus target price of $15.00, indicating a potential upside of 65.93%. Given Ambac Financial Group’s stronger consensus rating and higher probable upside, analysts clearly believe Ambac Financial Group is more favorable than First Acceptance.

Insider & Institutional Ownership

0.1% of First Acceptance shares are owned by institutional investors. Comparatively, 84.5% of Ambac Financial Group shares are owned by institutional investors. 9.5% of First Acceptance shares are owned by insiders. Comparatively, 6.2% of Ambac Financial Group shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Volatility & Risk

First Acceptance has a beta of 0.13, suggesting that its stock price is 87% less volatile than the S&P 500. Comparatively, Ambac Financial Group has a beta of 0.96, suggesting that its stock price is 4% less volatile than the S&P 500.

Valuation & Earnings

This table compares First Acceptance and Ambac Financial Group”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Acceptance	$559.43 million	0.28	$26.29 million	$0.77	5.58
Ambac Financial Group	$249.54 million	1.59	-$556.45 million	($15.34)	-0.59

First Acceptance has higher revenue and earnings than Ambac Financial Group. Ambac Financial Group is trading at a lower price-to-earnings ratio than First Acceptance, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares First Acceptance and Ambac Financial Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Acceptance	5.47%	16.58%	3.97%
Ambac Financial Group	-215.40%	-3.50%	-0.49%

Summary

First Acceptance beats Ambac Financial Group on 8 of the 14 factors compared between the two stocks.

About First Acceptance

First Acceptance Corporation, together with its subsidiaries, operates as a retailer, servicer, and underwriter of non-standard personal automobile insurance and related products in the United States. It issues non-standard automobile insurance policies to individuals based on their inability or unwillingness to obtain insurance coverage from standard carriers due to various factors, including their payment preference, failure to maintain continuous insurance coverage, or driving record. The company also underwrites auto and motorcycle insurance products; and renters, homeowners, commercial, pet, life, travel, outdoor vehicle, and hospital indemnity insurance products. In addition, it provides TeleMed, a subscription service that offers access to doctor for consulting, diagnosing, and prescribing medication for non-emergency illness. The company primarily distributes its products through its retail locations, as well as through call center and internet. As of December 31, 2021, it leased and operated 338 retail locations, and a call center. First Acceptance Corporation was founded in 1969 and is headquartered in Nashville, Tennessee.

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.