HCI Group (NASDAQ: HCII) and Arch Capital Group (NASDAQ:ACGL) are both financials companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, institutional ownership, profitability, analyst recommendations, risk, valuation and dividends.

Institutional and Insider Ownership

76.9% of Arch Capital Group shares are held by institutional investors. 6.6% of Arch Capital Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Ratings

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
HCI Group 0 0 0 0 N/A
Arch Capital Group 0 7 3 0 2.30

Arch Capital Group has a consensus target price of $92.88, suggesting a potential downside of 3.62%. Given Arch Capital Group’s higher probable upside, analysts plainly believe Arch Capital Group is more favorable than HCI Group.

Profitability

This table compares HCI Group and Arch Capital Group’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%
Arch Capital Group 15.65% 8.76% 2.32%

Valuation and Earnings

This table compares HCI Group and Arch Capital Group’s 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
Arch Capital Group $4.91 billion 2.64 $1.14 billion $5.47 17.62

Arch Capital Group has higher revenue and earnings than HCI Group.

Summary

Arch Capital Group beats HCI Group on 6 of the 8 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.

Arch Capital Group Company Profile

Arch Capital Group Ltd. provides insurance, reinsurance and mortgage insurance. The Company provides a range of property, casualty and mortgage insurance and reinsurance lines. The Company operates in five segments: insurance, reinsurance, mortgage, other and corporate. The insurance segment’s product lines include construction and national accounts; excess and surplus casualty; lenders products; professional lines; programs; property, energy, marine and aviation; travel, accident and health, and other. The reinsurance segment’s product lines include casualty; marine and aviation; other specialty; property catastrophe; property excluding property catastrophe, and other. The mortgage segment includes the results of Arch Mortgage Insurance Company and Arch Mortgage Insurance Designated Activity Company, which are providers of mortgage insurance products and services to the United States and European markets. The other segment includes the results of Watford Holdings Ltd.

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