Head to Head Analysis: Hagerty (NYSE:HGTY) vs. Arch Capital Group (NASDAQ:ACGL)

Arch Capital Group (NASDAQ:ACGL) and Hagerty (NYSE:HGTY) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, risk, dividends, analyst recommendations, profitability, earnings and valuation.

Valuation and Earnings

This table compares Arch Capital Group and Hagerty”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Arch Capital Group	$19.93 billion	1.79	$4.31 billion	$11.62	8.47
Hagerty	$1.20 billion	3.43	$17.02 million	$0.28	43.03

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

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Arch Capital Group and Hagerty, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Arch Capital Group	1	8	9	0	2.44
Hagerty	0	4	5	0	2.56

Arch Capital Group currently has a consensus target price of $109.27, suggesting a potential upside of 11.07%. Hagerty has a consensus target price of $14.13, suggesting a potential upside of 17.23%. Given Hagerty’s stronger consensus rating and higher possible upside, analysts plainly believe Hagerty is more favorable than Arch Capital Group.

Institutional & Insider Ownership

89.1% of Arch Capital Group shares are held by institutional investors. Comparatively, 20.5% of Hagerty shares are held by institutional investors. 4.2% of Arch Capital Group shares are held by company insiders. Comparatively, 16.7% of Hagerty shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Arch Capital Group and Hagerty’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Arch Capital Group	22.07%	16.73%	4.78%
Hagerty	5.85%	16.85%	4.94%

Risk & Volatility

Arch Capital Group has a beta of 0.42, meaning that its stock price is 58% less volatile than the S&P 500. Comparatively, Hagerty has a beta of 0.89, meaning that its stock price is 11% less volatile than the S&P 500.

Summary

Hagerty beats Arch Capital Group on 8 of the 14 factors compared between the two stocks.

About Arch Capital Group

Arch Capital Group Ltd., together with its subsidiaries, provides insurance, reinsurance, and mortgage insurance products worldwide. The company's Insurance segment offers primary and excess casualty coverages; loss sensitive primary casualty insurance programs; directors' and officers' liability, errors and omissions liability, employment practices and fiduciary liability, crime, professional indemnity, and other financial related coverages; medical professional and general liability insurance coverages; and workers' compensation and umbrella liability, as well as commercial automobile and inland marine products. It also provides property, energy, marine, and aviation insurance; travel insurance; accident, disability, and medical plan insurance coverages; captive insurance programs; employer's liability; contract and commercial surety coverages; and collateral protection, debt cancellation, and service contract reimbursement products. This segment markets its products through a group of licensed independent retail and wholesale brokers. Its Reinsurance segment provides casualty reinsurance for third party liability exposures; marine and aviation; motor reinsurance, whole account multi-line treaties, cyber, trade credit, surety, accident and health, workers' compensation catastrophe, agriculture, trade credit, and political risk products; reinsurance protection for catastrophic losses, and personal lines and commercial property exposures; life reinsurance; casualty clash; and risk management solutions. This segment markets its reinsurance products through brokers. The company's Mortgage segment offers direct mortgage insurance and mortgage reinsurance. The company was founded in 1995 and is based in Pembroke, Bermuda.

About Hagerty

Hagerty, Inc. provides insurance agency services worldwide. It offers motor vehicle and boat insurance products; and reinsurance products. The company provides Hagerty Media, which publishes contents through the Hagerty Drivers Club Magazine (HDC), video content, and social media channels; HDC that offers subscription based products and services, including HDC Magazine, automotive enthusiast events, proprietary vehicle valuation tools, emergency roadside services, and special vehicle-related discounts. In addition, it offers HVT, a valuation tool used by the customer to access current and historic pricing data of collector vehicle models. Further, the company offers Hagerty Garage + Social, a platform that provides clubhouses and car storage facilities. Hagerty, Inc. is headquartered in Traverse City, Michigan.