Assured Guaranty (NYSE:AGO – Get Free Report) and Lancashire (OTCMKTS:LCSHF – Get Free Report) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their risk, institutional ownership, earnings, dividends, valuation, analyst recommendations and profitability.
This table compares Assured Guaranty and Lancashire’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a breakdown of current ratings and recommmendations for Assured Guaranty and Lancashire, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Valuation & Earnings
This table compares Assured Guaranty and Lancashire’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Assured Guaranty||$723.00 million||5.22||$124.00 million||$5.10||12.62|
Assured Guaranty has higher revenue and earnings than Lancashire. Lancashire is trading at a lower price-to-earnings ratio than Assured Guaranty, indicating that it is currently the more affordable of the two stocks.
Assured Guaranty pays an annual dividend of $1.12 per share and has a dividend yield of 1.7%. Lancashire pays an annual dividend of $0.15 per share and has a dividend yield of 2.1%. Assured Guaranty pays out 22.0% of its earnings in the form of a dividend. Lancashire pays out 14.6% 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 12 consecutive years. Lancashire is clearly the better dividend stock, given its higher yield and lower payout ratio.
Institutional & Insider Ownership
88.8% of Assured Guaranty shares are held by institutional investors. Comparatively, 63.3% of Lancashire shares are held by institutional investors. 4.5% of Assured Guaranty shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Assured Guaranty beats Lancashire on 12 of the 14 factors compared between the two stocks.
About Assured Guaranty
Assured Guaranty Ltd., through its subsidiaries, provides credit protection products to public finance, infrastructure, and structured finance markets in the United States and internationally. The company operates in two segments, Insurance and Asset Management. It offers financial guaranty insurance that protects holders of debt instruments and other monetary obligations from defaults in scheduled payments. In addition, the company insures and reinsures various debt obligations, including bonds issued by the United States state governmental authorities; and notes issued to finance infrastructure projects. Further, it 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. Additionally, the company is 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, pooled corporate obligations, and financial products. Furthermore, it offers specialty insurance and reinsurance that include life and aircraft residual value insurance 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.
Lancashire Holdings Limited, together with its subsidiaries, provides specialty insurance and reinsurance products in London, Bermuda, and Australia. The company operates through five segments: Property and Casualty Reinsurance, Property and Casualty Insurance, Aviation, Energy, and Marine. It offers property direct and facultative, property political risk and sovereign risk, and property terrorism and political violence insurance products, as well as property reinsurance services; and aviation AV52, aviation consortium, airline hull and liability, and satellite insurance products. The company also provides marine hull, total loss only, mortgagees interests insurance, mortgagees additional perils, excess protection and indemnity, marine war, and builder's risks; and energy insurance products covering upstream, downstream and onshore operational, and upstream construction all risks business. In addition, it offers general insurance, support, insurance agent, and insurance mediation services. Lancashire Holdings Limited was incorporated in 2005 and is headquartered in Hamilton, Bermuda.
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