The Navigators Group (NASDAQ: NAVG) and Argo Group International Holdings (NASDAQ:AGII) are both small-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, dividends, profitabiliy, analyst recommendations, valuation, risk and institutional ownership.

Insider & Institutional Ownership

73.0% of The Navigators Group shares are owned by institutional investors. Comparatively, 88.3% of Argo Group International Holdings shares are owned by institutional investors. 24.1% of The Navigators Group shares are owned by insiders. Comparatively, 5.8% of Argo Group International Holdings shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares The Navigators Group and Argo Group International Holdings’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
The Navigators Group $1.21 billion 1.34 $126.72 million $2.68 20.56
Argo Group International Holdings $1.62 billion 1.14 $231.40 million $5.06 12.05

Argo Group International Holdings has higher revenue and earnings than The Navigators Group. Argo Group International Holdings is trading at a lower price-to-earnings ratio than The Navigators Group, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares The Navigators Group and Argo Group International Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
The Navigators Group 6.64% 5.99% 1.46%
Argo Group International Holdings 9.53% 6.07% 1.48%

Analyst Recommendations

This is a summary of recent recommendations and price targets for The Navigators Group and Argo Group International Holdings, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
The Navigators Group 0 5 0 0 2.00
Argo Group International Holdings 1 1 0 0 1.50

The Navigators Group currently has a consensus price target of $56.75, indicating a potential upside of 2.99%. Argo Group International Holdings has a consensus price target of $62.00, indicating a potential upside of 1.72%. Given The Navigators Group’s stronger consensus rating and higher possible upside, analysts clearly believe The Navigators Group is more favorable than Argo Group International Holdings.

Dividends

The Navigators Group pays an annual dividend of $0.24 per share and has a dividend yield of 0.4%. Argo Group International Holdings pays an annual dividend of $1.08 per share and has a dividend yield of 1.8%. The Navigators Group pays out 9.0% of its earnings in the form of a dividend. Argo Group International Holdings pays out 21.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Risk and Volatility

The Navigators Group has a beta of 0.76, suggesting that its share price is 24% less volatile than the S&P 500. Comparatively, Argo Group International Holdings has a beta of 0.82, suggesting that its share price is 18% less volatile than the S&P 500.

Summary

Argo Group International Holdings beats The Navigators Group on 9 of the 15 factors compared between the two stocks.

About The Navigators Group

The Navigators Group, Inc. is an insurance holding company. The Company is an international insurance company focused on marine insurance. The Company’s segments include U.S. Insurance, International Insurance (Int’l Insurance), Global Reinsurance (GlobalRe) and Corporate. The Company’s Property and Casualty (P&C) insurance business primarily offers general liability coverage, and umbrella and excess liability coverage to commercial enterprises through its U.S. Insurance and Int’l Insurance segments. It also offers reinsurance products through its GlobalRe segment. It distributes its products through international, national and regional, retail and wholesale insurance brokers. The Company’s U.S. Insurance and Int’l Insurance segments consists of three segments, such as Marine, Property and Casualty (P&C) and Professional Liability. Its GlobalRe products include accident & health (A&H), marine, P&C and professional liability.

About Argo Group International Holdings

Argo Group International Holdings, Ltd. is an underwriter of specialty insurance and reinsurance products in the property and casualty market. The Company operates through four segments: Excess and Surplus Lines, Commercial Specialty, International Specialty and Syndicate 1200. Excess and Surplus Lines segment carriers focus on risks that the standard (admitted) market is unwilling or unable to underwrite. The Excess and Surplus Lines segment consists of two operating platforms: Colony Specialty and Argo Pro. Commercial Specialty segment provides property, casualty and surety coverages designed to meet the insurance needs of businesses within certain markets. International Specialty segment underwrites insurance and reinsurance risks. It operate as Argo Re, the Casualty and Professional Lines unit of Argo Insurance in Bermuda, and Argo Seguros Brazil, S.A. in Brazil. The Syndicate 1200 segment underwrites around the world property, specialty and non-United States liability insurance.

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