RenaissanceRe (NYSE:RNR – Get Free Report) and Ambac Financial Group (NYSE:AMBC – Get Free Report) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, dividends, valuation and analyst recommendations.
Profitability
This table compares RenaissanceRe and Ambac Financial Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| RenaissanceRe | 14.23% | 16.83% | 3.17% |
| Ambac Financial Group | -215.40% | -3.50% | -0.49% |
Volatility and Risk
RenaissanceRe has a beta of 0.25, meaning that its stock price is 75% less volatile than the S&P 500. Comparatively, Ambac Financial Group has a beta of 0.96, meaning that its stock price is 4% less volatile than the S&P 500.
Analyst Ratings
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| RenaissanceRe | 1 | 11 | 4 | 0 | 2.19 |
| Ambac Financial Group | 1 | 0 | 1 | 0 | 2.00 |
RenaissanceRe presently has a consensus price target of $283.67, indicating a potential upside of 6.57%. Ambac Financial Group has a consensus price target of $10.00, indicating a potential upside of 22.35%. Given Ambac Financial Group’s higher probable upside, analysts plainly believe Ambac Financial Group is more favorable than RenaissanceRe.
Valuation and Earnings
This table compares RenaissanceRe and Ambac Financial Group”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| RenaissanceRe | $12.10 billion | 1.01 | $1.87 billion | $35.99 | 7.40 |
| Ambac Financial Group | $252.94 million | 1.50 | -$556.45 million | ($13.62) | -0.60 |
RenaissanceRe has higher revenue and earnings than Ambac Financial Group. Ambac Financial Group is trading at a lower price-to-earnings ratio than RenaissanceRe, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
100.0% of RenaissanceRe shares are owned by institutional investors. Comparatively, 84.5% of Ambac Financial Group shares are owned by institutional investors. 1.3% of RenaissanceRe shares are owned by company insiders. Comparatively, 6.2% of Ambac Financial Group shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Summary
RenaissanceRe beats Ambac Financial Group on 10 of the 14 factors compared between the two stocks.
About RenaissanceRe
RenaissanceRe Holdings Ltd., together with its subsidiaries, provides reinsurance and insurance products in the United States and internationally. The company operates through Property, and Casualty and Specialty segments. The Property segment writes property catastrophe excess of loss reinsurance and excess of loss reinsurance to insure insurance and reinsurance companies against natural and man-made catastrophes, including hurricanes, earthquakes, typhoons, and tsunamis, as well as winter storms, freezes, floods, fires, windstorms, tornadoes, explosions, and acts of terrorism; and other property class of products, such as proportional reinsurance, property per risk, property reinsurance, binding facilities, and regional U.S. multi-line reinsurance. The Casualty and Specialty segment writes various classes of products, such as directors and officers, medical malpractice, and professional indemnity; automobile and employer’s liability, casualty clash, umbrella or excess casualty, workers’ compensation, and general liability; financial and mortgage guaranty, political risk, surety, and trade credit; and accident and health, agriculture, aviation, cyber, energy, marine, satellite, and terrorism. It distributes products and services primarily through intermediaries. The company invests in and manages funds. RenaissanceRe Holdings Ltd. was founded in 1993 and is headquartered in Pembroke, Bermuda.
About Ambac Financial Group
Ambac Financial Group, Inc. operates as a financial services holding company. It operates three businesses: Specialty Property and Casualty Insurance, Insurance Distribution, and Legacy Financial Guarantee (LFG) Insurance. The Specialty Property and Casualty Insurance business provides specialty property and casualty program insurance with a focus commercial and personal liability risks. The Insurance Distribution business includes the specialty property and casualty insurance distribution business, which includes managing general agents and underwriters, insurance wholesalers, brokers, and other distribution businesses. The LFG Insurance business offers financial guarantee insurance policies that provide an unconditional and irrevocable guarantee, which protects the holder of a debt obligation against non-payment when due of the principal and interest on the obligations guaranteed. Ambac Financial Group, Inc. was incorporated in 1991 and is headquartered in New York, New York.
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