Arch Capital Group (ACGL) versus Alterra Capital (NASDAQ:ALTE) Head-To-Head Contrast

Arch Capital Group (NASDAQ: ACGL) and Alterra Capital (NASDAQ:ALTE) are both mid-cap finance companies, but which is the better stock? We will compare the two companies based on the strength of their risk, dividends, institutional ownership, earnings, analyst recommendations, profitability and valuation.

Valuation and Earnings

This table compares Arch Capital Group and Alterra Capital’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Arch Capital Group $4.39 billion 2.83 $692.73 million $3.10 30.60
Alterra Capital N/A N/A N/A $1.65 19.73

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

Profitability

This table compares Arch Capital Group and Alterra Capital’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Arch Capital Group 9.44% 5.57% 1.44%
Alterra Capital N/A N/A N/A

Institutional & Insider Ownership

79.5% of Arch Capital Group shares are owned by institutional investors. 6.6% of Arch Capital Group shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Ratings

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Arch Capital Group 0 6 4 0 2.40
Alterra Capital 0 0 0 0 N/A

Arch Capital Group currently has a consensus price target of $99.67, indicating a potential upside of 5.07%. Given Arch Capital Group’s higher probable upside, research analysts plainly believe Arch Capital Group is more favorable than Alterra Capital.

Summary

Arch Capital Group beats Alterra Capital on 9 of the 9 factors compared between the two stocks.

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.

Alterra Capital Company Profile

Alterra Capital Holdings Limited (Alterra) is engaged in providing diversified specialty insurance and reinsurance products to corporations, public entities and property and casualty insurers. In Bermuda, the Company conducts its insurance and reinsurance operations through Alterra Bermuda. In Europe, the Company conducts its non-Lloyd’s operations primarily from Dublin, Ireland through Alterra Europe. In the United States, the Company’s U.S. reinsurance operations are conducted through Alterra Re USA, a Connecticut-domiciled reinsurance company. The Company’s U.S. insurance operations are conducted through Alterra E&S. In Latin America, the Company provides reinsurance to clients through Alterra at Lloyd’s in Rio de Janeiro, Brazil, using Lloyd’s admitted status, through Alterra Europe. In June 2012, the Company formed New Point V Limited. On May 1, 2013, Alterra Capital was acquired by Markel Corporation.

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