Ambac (AMBC) and Assured Guaranty (AGO) Head to Head Survey

Assured Guaranty (NYSE: AGO) and Ambac (NASDAQ:AMBC) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, valuation, risk, analyst recommendations, earnings, dividends and institutional ownership.

Profitability

This table compares Assured Guaranty and Ambac’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Assured Guaranty 40.53% 7.97% 3.76%
Ambac 15.31% 13.71% 1.11%

Insider & Institutional Ownership

74.9% of Ambac shares are owned by institutional investors. 2.6% of Assured Guaranty shares are owned by company insiders. Comparatively, 1.0% of Ambac shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Assured Guaranty and Ambac’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Assured Guaranty $1.74 billion 2.29 $730.00 million N/A N/A
Ambac $621.25 million 1.38 -$328.71 million N/A N/A

Assured Guaranty has higher revenue and earnings than Ambac.

Volatility and Risk

Assured Guaranty has a beta of 1.31, suggesting that its share price is 31% more volatile than the S&P 500. Comparatively, Ambac has a beta of 1.69, suggesting that its share price is 69% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations for Assured Guaranty and Ambac, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Assured Guaranty 0 0 4 0 3.00
Ambac 0 1 1 0 2.50

Assured Guaranty currently has a consensus price target of $48.33, suggesting a potential upside of 36.15%. Ambac has a consensus price target of $23.50, suggesting a potential upside of 24.21%. Given Assured Guaranty’s stronger consensus rating and higher probable upside, research analysts clearly believe Assured Guaranty is more favorable than Ambac.

Dividends

Assured Guaranty pays an annual dividend of $0.64 per share and has a dividend yield of 1.8%. Ambac does not pay a dividend. Assured Guaranty has increased its dividend for 6 consecutive years.

Summary

Assured Guaranty beats Ambac on 12 of the 15 factors compared between the two stocks.

Assured Guaranty Company Profile

Assured Guaranty Ltd., through its subsidiaries, provides credit protection products to public finance, infrastructure, and structured finance markets in the United States and internationally. It offers financial guaranty insurance that protects holders of debt instruments and other monetary obligations from defaults in scheduled payments. The company insures various debt obligations, including bonds issued by the United States state or municipal governmental authorities; and notes issued to finance infrastructure projects. It also insures and reinsures various types of the United States public finance obligations, such as general obligation, tax-backed, municipal utility, transportation, healthcare, higher education, infrastructure, housing revenue, investor-owned utility, and other public finance bonds; and various types of non-United States public finance obligations comprising infrastructure finance, regulated utilities, pooled infrastructure, and other public finance obligations. In addition, the company insures and reinsures various types of the United States and non-United States structured finance obligations, including pooled corporate obligations, residential mortgage-backed securities, insurance securitization obligations, consumer receivables securities, financial products, commercial receivables securities, commercial mortgage-backed securities, and other structured finance securities. It markets its financial guaranty insurance directly to issuers and underwriters of public finance and structured finance securities, as well as to investors in such obligations. Assured Guaranty Ltd. was founded in 2003 and is headquartered in Hamilton, Bermuda.

Ambac Company Profile

Ambac Financial Group, Inc., a financial services holding company, provides financial guarantees to clients in public and private sectors worldwide. It offers financial guarantee insurance policies and credit derivative contracts for public finance, structured finance, and international finance. The company was founded in 1971 and is headquartered in New York, New York.

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