Argo Group International Holdings (NASDAQ: AGII) and Loews Corporation (NYSE:L) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their earnings, valuation, risk, institutional ownership, dividends, profitability and analyst recommendations.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Argo Group International Holdings and Loews Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Argo Group International Holdings 1 1 0 0 1.50
Loews Corporation 1 1 0 0 1.50

Argo Group International Holdings currently has a consensus target price of $70.00, indicating a potential upside of 15.42%. Loews Corporation has a consensus target price of $39.00, indicating a potential downside of 17.88%. Given Argo Group International Holdings’ higher probable upside, equities research analysts clearly believe Argo Group International Holdings is more favorable than Loews Corporation.

Profitability

This table compares Argo Group International Holdings and Loews Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Argo Group International Holdings 10.04% 6.39% 1.52%
Loews Corporation 8.44% 4.84% 1.47%

Institutional & Insider Ownership

87.1% of Argo Group International Holdings shares are owned by institutional investors. Comparatively, 58.6% of Loews Corporation shares are owned by institutional investors. 4.9% of Argo Group International Holdings shares are owned by insiders. Comparatively, 11.8% of Loews Corporation shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Dividends

Argo Group International Holdings pays an annual dividend of $1.08 per share and has a dividend yield of 1.8%. Loews Corporation pays an annual dividend of $0.25 per share and has a dividend yield of 0.5%. Argo Group International Holdings pays out 19.5% of its earnings in the form of a dividend. Loews Corporation pays out 7.5% 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.

Risk and Volatility

Argo Group International Holdings has a beta of 0.82, meaning that its share price is 18% less volatile than the S&P 500. Comparatively, Loews Corporation has a beta of 0.71, meaning that its share price is 29% less volatile than the S&P 500.

Valuation and Earnings

This table compares Argo Group International Holdings and Loews Corporation’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Argo Group International Holdings $1.69 billion 1.08 $244.20 million $5.54 10.95
Loews Corporation $13.28 billion 1.20 $3.33 billion $3.32 14.30

Loews Corporation has higher revenue and earnings than Argo Group International Holdings. Argo Group International Holdings is trading at a lower price-to-earnings ratio than Loews Corporation, indicating that it is currently the more affordable of the two stocks.

Summary

Argo Group International Holdings beats Loews Corporation on 8 of the 14 factors compared between the two stocks.

Argo Group International Holdings Company Profile

Argo Group International Holdings, Ltd. is an underwriter of specialty insurance and reinsurance products in the property and casualty market. The Company operates through four segments: Excess and Surplus Lines, Commercial Specialty, International Specialty and Syndicate 1200. Excess and Surplus Lines segment carriers focus on risks that the standard (admitted) market is unwilling or unable to underwrite. The Excess and Surplus Lines segment consists of two operating platforms: Colony Specialty and Argo Pro. Commercial Specialty segment provides property, casualty and surety coverages designed to meet the insurance needs of businesses within certain markets. International Specialty segment underwrites insurance and reinsurance risks. It operate as Argo Re, the Casualty and Professional Lines unit of Argo Insurance in Bermuda, and Argo Seguros Brazil, S.A. in Brazil. The Syndicate 1200 segment underwrites around the world property, specialty and non-United States liability insurance.

Loews Corporation Company Profile

Loews Corporation is a holding company. The Company, through its subsidiaries, is engaged in commercial property and casualty insurance; operation of offshore oil and gas drilling rigs; transportation and storage of natural gas and natural gas liquids, and operation of a chain of hotels. The Company has five segments consisted of its four individual operating subsidiaries, CNA Financial Corporation (CNA), Diamond Offshore Drilling, Inc. (Diamond Offshore), Boardwalk Pipeline Partners, LP (Boardwalk Pipeline) and Loews Hotels Holding Corporation (Loews Hotels), and the Corporate segment. CNA’s insurance products include commercial property and casualty coverages, including surety. CNA’s services include risk management, information services, warranty and claims administration. CNA’s core business, commercial property and casualty insurance operations include Specialty, Commercial and International lines of business.

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