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

Earnings and Valuation

This table compares White Mountains Insurance Group and Arch Capital Group’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
White Mountains Insurance Group $1.43 billion 2.61 $98.90 million $22.39 39.00
Arch Capital Group $4.91 billion 2.64 $1.14 billion $5.47 17.64

Arch Capital Group has higher revenue and earnings than White Mountains Insurance Group. Arch Capital Group is trading at a lower price-to-earnings ratio than White Mountains Insurance Group, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

White Mountains Insurance Group has a beta of 0.52, meaning that its stock price is 48% less volatile than the S&P 500. Comparatively, Arch Capital Group has a beta of 0.67, meaning that its stock price is 33% less volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
White Mountains Insurance Group 9.80% 1.01% 0.57%
Arch Capital Group 15.65% 8.76% 2.32%

Analyst Ratings

This is a breakdown of current ratings for White Mountains Insurance Group and Arch Capital Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
White Mountains Insurance Group 0 0 0 0 N/A
Arch Capital Group 0 6 3 0 2.33

Arch Capital Group has a consensus price target of $96.43, indicating a potential downside of 0.05%. Given Arch Capital Group’s higher probable upside, analysts clearly believe Arch Capital Group is more favorable than White Mountains Insurance Group.

Dividends

White Mountains Insurance Group pays an annual dividend of $1.00 per share and has a dividend yield of 0.1%. Arch Capital Group does not pay a dividend. White Mountains Insurance Group pays out 4.5% of its earnings in the form of a dividend.

Institutional and Insider Ownership

88.1% of White Mountains Insurance Group shares are owned by institutional investors. Comparatively, 76.9% of Arch Capital Group shares are owned by institutional investors. 5.1% of White Mountains Insurance Group shares are owned by insiders. Comparatively, 6.6% of Arch Capital Group shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

Arch Capital Group beats White Mountains Insurance Group on 11 of the 15 factors compared between the two stocks.

About White Mountains Insurance Group

White Mountains Insurance Group, Ltd. is a holding company. The Company’s principal businesses are conducted through its insurance subsidiaries and other affiliates. Its segments include OneBeacon, HG Global/BAM and Other Operations. The OneBeacon segment consists of the operations of OneBeacon Insurance Group, Ltd. (OneBeacon Ltd.), which owns a family of property and casualty insurance companies, and Split Rock Insurance, Ltd. (Split Rock), a reinsurance company (collectively, OneBeacon). The HG Global/BAM segment consists of the operations of HG Global Ltd. (HG Global) and Build America Mutual Assurance Company (BAM). The Other Operations segment consists of the Company and its intermediate holding companies, its investment management subsidiary, White Mountains Advisors LLC, and certain consolidated and unconsolidated private capital investments. OneBeacon is a specialty property and casualty insurance provider that offers a range of insurance products in the United States.

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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