Arch Capital Group (NASDAQ:ACGL – Get Free Report) and Trupanion (NASDAQ:TRUP – Get Free Report) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, dividends, risk, analyst recommendations, institutional ownership, valuation and earnings.
Insider and Institutional Ownership
89.1% of Arch Capital Group shares are owned by institutional investors. 3.3% of Arch Capital Group shares are owned by insiders. Comparatively, 5.6% of Trupanion shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Risk & Volatility
Arch Capital Group has a beta of 0.28, suggesting that its stock price is 72% less volatile than the S&P 500. Comparatively, Trupanion has a beta of 1.44, suggesting that its stock price is 44% more volatile than the S&P 500.
Analyst Ratings
This is a breakdown of current recommendations and price targets for Arch Capital Group and Trupanion, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Arch Capital Group | 1 | 8 | 7 | 0 | 2.38 |
| Trupanion | 0 | 5 | 1 | 0 | 2.17 |
Arch Capital Group currently has a consensus price target of $109.94, suggesting a potential upside of 3.37%. Trupanion has a consensus price target of $38.40, suggesting a potential upside of 27.45%. Given Trupanion’s higher probable upside, analysts clearly believe Trupanion is more favorable than Arch Capital Group.
Profitability
This table compares Arch Capital Group and Trupanion’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Arch Capital Group | 23.31% | 16.62% | 4.64% |
| Trupanion | 1.53% | 5.96% | 2.55% |
Earnings & Valuation
This table compares Arch Capital Group and Trupanion”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Arch Capital Group | $19.93 billion | 1.82 | $4.40 billion | $12.23 | 8.70 |
| Trupanion | $1.44 billion | 0.92 | $19.43 million | $0.53 | 56.85 |
Arch Capital Group has higher revenue and earnings than Trupanion. Arch Capital Group is trading at a lower price-to-earnings ratio than Trupanion, indicating that it is currently the more affordable of the two stocks.
Summary
Arch Capital Group beats Trupanion on 10 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 Trupanion
Trupanion, Inc., together with its subsidiaries, provides medical insurance for cats and dogs on a monthly subscription basis in the United States, Canada, Continental Europe, and Australia. The company operates in two segments, Subscription Business and Other Business. It serves pet owners and veterinarians. The company was formerly known as Vetinsurance International, Inc. changed its name to Trupanion, Inc. in 2013. Trupanion, Inc. was founded in 2000 and is headquartered in Seattle, Washington.
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