Analyzing Argo Group International (AGII) & OneBeacon Insurance Group (OB)

Argo Group International (NASDAQ: AGII) and OneBeacon Insurance Group (NYSE:OB) are both small-cap financials companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, profitability, valuation, institutional ownership, earnings, risk and dividends.

Risk and Volatility

Argo Group International has a beta of 0.74, indicating that its stock price is 26% less volatile than the S&P 500. Comparatively, OneBeacon Insurance Group has a beta of 0.57, indicating that its stock price is 43% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Argo Group International and OneBeacon Insurance Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Argo Group International 1 0 1 0 2.00
OneBeacon Insurance Group 0 0 0 0 N/A

Argo Group International presently has a consensus price target of $71.00, indicating a potential upside of 20.75%. Given Argo Group International’s higher probable upside, equities analysts clearly believe Argo Group International is more favorable than OneBeacon Insurance Group.

Dividends

Argo Group International pays an annual dividend of $1.08 per share and has a dividend yield of 1.8%. OneBeacon Insurance Group pays an annual dividend of $0.84 per share and has a dividend yield of 4.6%. Argo Group International pays out 63.9% of its earnings in the form of a dividend. OneBeacon Insurance Group pays out 116.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Insider and Institutional Ownership

85.2% of Argo Group International shares are held by institutional investors. Comparatively, 17.3% of OneBeacon Insurance Group shares are held by institutional investors. 4.9% of Argo Group International shares are held by insiders. Comparatively, 76.6% of OneBeacon Insurance Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Argo Group International and OneBeacon Insurance Group’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Argo Group International $1.58 billion 1.11 $146.70 million $1.69 34.79
OneBeacon Insurance Group N/A N/A N/A $0.72 25.13

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

Profitability

This table compares Argo Group International and OneBeacon Insurance Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Argo Group International 3.15% 1.36% 0.31%
OneBeacon Insurance Group 0.10% -0.12% 0.03%

Summary

Argo Group International beats OneBeacon Insurance Group on 11 of the 13 factors compared between the two stocks.

About Argo Group International

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.

About OneBeacon Insurance Group

OneBeacon Insurance Group, Ltd. (OneBeacon) is a specialty property and casualty insurance writer that offers a range of insurance products in the United States. The Company’s segments include Specialty Products, Specialty Industries, and Investing, Financing and Corporate. As of December 31, 2016, the Specialty Products segment consisted of 10 underwriting operating segments representing an aggregation based on those that offer products, coverages and services to customers across the United States. As of December 31, 2016, the Specialty Industries segment consisted of six underwriting operating segments representing an aggregation based on those that focus on solving the needs of a particular customer or industry group. The Investing, Financing and Corporate segment includes the investing and financing activities for OneBeacon on a consolidated basis, and certain other activities conducted through the Company and its intermediate subsidiaries.

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