Conifer Holdings (NASDAQ: CNFR) and Arch Capital Group (NASDAQ:ACGL) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, profitabiliy, dividends, risk, valuation, analyst recommendations and institutional ownership.

Risk & Volatility

Conifer Holdings has a beta of 1.01, indicating that its share price is 1% more volatile than the S&P 500. Comparatively, Arch Capital Group has a beta of 0.66, indicating that its share price is 34% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and price targets for Conifer Holdings and Arch Capital Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Conifer Holdings 0 0 0 0 N/A
Arch Capital Group 0 7 4 0 2.36

Arch Capital Group has a consensus target price of $91.67, suggesting a potential downside of 1.37%. Given Arch Capital Group’s higher possible upside, analysts clearly believe Arch Capital Group is more favorable than Conifer Holdings.

Profitability

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

Net Margins Return on Equity Return on Assets
Conifer Holdings -8.37% -12.17% -4.29%
Arch Capital Group 16.92% 8.85% 2.38%

Insider and Institutional Ownership

32.7% of Conifer Holdings shares are held by institutional investors. Comparatively, 77.6% of Arch Capital Group shares are held by institutional investors. 44.2% of Conifer Holdings shares are held by company insiders. Comparatively, 6.6% of Arch Capital Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Conifer Holdings and Arch Capital Group’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Conifer Holdings $98.46 million 0.54 -$6.90 million ($1.08) -6.44
Arch Capital Group $4.70 billion 2.65 $1.07 billion $5.87 15.83

Arch Capital Group has higher revenue and earnings than Conifer Holdings. Conifer Holdings 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.

Summary

Arch Capital Group beats Conifer Holdings on 10 of the 12 factors compared between the two stocks.

About Conifer Holdings

Conifer Holdings, Inc. is an insurance holding company. Through its insurance company subsidiaries, the Company offers insurance coverage in both specialty commercial and specialty personal product lines. It operates through two segments: commercial lines and personal lines. It is engaged in underwriting and marketing insurance coverage, and administering claims processing for such policies. The Company offers coverage for property, liability, automobile, and other miscellaneous coverage primarily to owner-operated small and mid-sized businesses, professional organizations and hospitality businesses, such as restaurants, bars and taverns. The Company offers coverage for low-value dwelling, wind-exposed homeowners and automobile. Its personal lines products include Catastrophe coverage, including hurricane and wind coverage, to underserved homeowners in Florida, Hawaii and Texas, and Dwelling insurance.

About Arch Capital Group

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.

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