American Coastal Insurance (NASDAQ:ACIC – Get Free Report) and Arch Capital Group (NASDAQ:ACGL – Get Free Report) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, risk, institutional ownership, earnings, profitability, valuation and analyst recommendations.
Profitability
This table compares American Coastal Insurance and Arch Capital Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| American Coastal Insurance | 25.95% | 30.06% | 6.84% |
| Arch Capital Group | 20.96% | 16.38% | 4.62% |
Valuation and Earnings
This table compares American Coastal Insurance and Arch Capital Group”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| American Coastal Insurance | $327.88 million | 1.65 | $75.72 million | $1.71 | 6.47 |
| Arch Capital Group | $19.04 billion | 1.73 | $4.31 billion | $10.69 | 8.48 |
Arch Capital Group has higher revenue and earnings than American Coastal Insurance. American Coastal Insurance is trading at a lower price-to-earnings ratio than Arch Capital Group, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
American Coastal Insurance has a beta of -0.55, indicating that its stock price is 155% less volatile than the S&P 500. Comparatively, Arch Capital Group has a beta of 0.45, indicating that its stock price is 55% less volatile than the S&P 500.
Institutional and Insider Ownership
22.1% of American Coastal Insurance shares are owned by institutional investors. Comparatively, 89.1% of Arch Capital Group shares are owned by institutional investors. 49.9% of American Coastal Insurance shares are owned by company insiders. Comparatively, 4.2% of Arch Capital Group shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Analyst Ratings
This is a breakdown of current ratings and price targets for American Coastal Insurance and Arch Capital Group, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| American Coastal Insurance | 0 | 1 | 1 | 0 | 2.50 |
| Arch Capital Group | 1 | 9 | 8 | 0 | 2.39 |
Arch Capital Group has a consensus price target of $107.53, suggesting a potential upside of 18.62%. Given Arch Capital Group’s higher possible upside, analysts clearly believe Arch Capital Group is more favorable than American Coastal Insurance.
Summary
Arch Capital Group beats American Coastal Insurance on 9 of the 14 factors compared between the two stocks.
About American Coastal Insurance
American Coastal Insurance Corporation operates as a property and casualty insurance holding company that sources, writes, and services residential personal and commercial property, and casualty insurance policies in the United States. The company offers structure, content, and liability coverage for standard single-family homeowners, renters, and condominium unit owners. It also provides commercial multi-peril property insurance for residential condominium associations and apartments, as well as loss or damage to buildings, inventory, and equipment caused by fire, wind, hail, water, theft, and vandalism. In addition, the company offers equipment breakdown, identity theft, cyber security, and flood policies. The company markets and distributes its products through a network of independent agencies. The company was formerly known as United Insurance Holdings Corp. and changed its name to American Coastal Insurance Corporation in August 2023. American Coastal Insurance Corporation was founded in 1999 and is headquartered in Saint Petersburg, Florida.
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.
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