Contrasting Fidelity National Financial (FNF) and Ambac Financial Group (AMBC)
Fidelity National Financial (NYSE: FNF) and Ambac Financial Group (NASDAQ:AMBC) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, risk, institutional ownership, dividends, profitabiliy, earnings and valuation.
Volatility and Risk
Fidelity National Financial has a beta of 0.93, meaning that its stock price is 7% less volatile than the S&P 500. Comparatively, Ambac Financial Group has a beta of 1.92, meaning that its stock price is 92% more volatile than the S&P 500.
Valuation and Earnings
This table compares Fidelity National Financial and Ambac Financial Group’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Fidelity National Financial||$10.14 billion||1.27||$1.82 billion||$2.29||20.77|
|Ambac Financial Group||$576.89 million||1.58||$234.44 million||($1.35)||-14.94|
Fidelity National Financial has higher revenue and earnings than Ambac Financial Group. Ambac Financial Group is trading at a lower price-to-earnings ratio than Fidelity National Financial, indicating that it is currently the more affordable of the two stocks.
This table compares Fidelity National Financial and Ambac Financial Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Fidelity National Financial||7.49%||10.76%||5.00%|
|Ambac Financial Group||-9.76%||7.90%||0.69%|
This is a summary of recent ratings and target prices for Fidelity National Financial and Ambac Financial Group, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Fidelity National Financial||0||1||3||0||2.75|
|Ambac Financial Group||0||1||1||0||2.50|
Fidelity National Financial presently has a consensus price target of $45.00, indicating a potential downside of 5.40%. Ambac Financial Group has a consensus price target of $21.50, indicating a potential upside of 6.59%. Given Ambac Financial Group’s higher probable upside, analysts clearly believe Ambac Financial Group is more favorable than Fidelity National Financial.
Fidelity National Financial pays an annual dividend of $1.00 per share and has a dividend yield of 2.1%. Ambac Financial Group does not pay a dividend. Fidelity National Financial pays out 43.7% of its earnings in the form of a dividend. Fidelity National Financial has raised its dividend for 5 consecutive years.
Institutional and Insider Ownership
84.2% of Fidelity National Financial shares are owned by institutional investors. Comparatively, 74.1% of Ambac Financial Group shares are owned by institutional investors. 5.0% of Fidelity National Financial shares are owned by insiders. Comparatively, 1.0% of Ambac Financial Group shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Fidelity National Financial beats Ambac Financial Group on 12 of the 16 factors compared between the two stocks.
Fidelity National Financial Company Profile
Fidelity National Financial, Inc. (FNF) is a holding company. FNF, through its subsidiaries, provides title insurance, mortgage services and diversified services. FNF operates in four segments: Fidelity National Title Group, Remy, Restaurant Group and Corporate and Other. The Fidelity National Title Group segment consists of the operations of FNF’s title insurance underwriters and related businesses. The Remy segment is a designer, manufacturer, remanufacturer, marketer and distributor of aftermarket and original equipment electrical components for automobiles, light trucks, heavy-duty trucks and other vehicles. The Restaurant Group segment consists of the operations of ABRH. The corporate and other segment consists of the operations of the holding company. In January 2014, FNF announced the closing of its acquisition of Lender Processing Services, Inc. (LPS). On January 2, 2014, FNF formed a wholly owned subsidiary Black Knight Financial Services, Inc.
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