Ambac Financial Group (NYSE:AMBC) vs. First Acceptance (OTCMKTS:FACO) Head-To-Head Review

Ambac Financial Group (NYSE:AMBC) and First Acceptance (OTCMKTS:FACO) are both small-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their profitability, valuation, institutional ownership, dividends, risk, analyst recommendations and earnings.

Institutional and Insider Ownership

84.5% of Ambac Financial Group shares are owned by institutional investors. Comparatively, 0.1% of First Acceptance shares are owned by institutional investors. 6.2% of Ambac Financial Group shares are owned by insiders. Comparatively, 9.5% of First Acceptance shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Ambac Financial Group and First Acceptance’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ambac Financial Group	-215.40%	-3.50%	-0.49%
First Acceptance	5.47%	16.58%	3.97%

Risk & Volatility

Ambac Financial Group has a beta of 0.96, meaning that its stock price is 4% less volatile than the S&P 500. Comparatively, First Acceptance has a beta of 0.13, meaning that its stock price is 87% less volatile than the S&P 500.

Valuation & Earnings

This table compares Ambac Financial Group and First Acceptance”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ambac Financial Group	$249.54 million	1.59	-$556.45 million	($15.34)	-0.59
First Acceptance	$559.43 million	0.28	$26.29 million	$0.77	5.58

First Acceptance has higher revenue and earnings than Ambac Financial Group. Ambac Financial Group is trading at a lower price-to-earnings ratio than First Acceptance, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Ambac Financial Group and First Acceptance, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ambac Financial Group	1	0	1	0	2.00
First Acceptance	0	0	0	0	0.00

Ambac Financial Group presently has a consensus price target of $15.00, suggesting a potential upside of 65.93%. Given Ambac Financial Group’s stronger consensus rating and higher possible upside, equities analysts plainly believe Ambac Financial Group is more favorable than First Acceptance.

Summary

First Acceptance beats Ambac Financial Group on 8 of the 14 factors compared between the two stocks.

About Ambac Financial Group

Ambac Financial Group, Inc. operates as a financial services holding company. It operates three businesses: Specialty Property and Casualty Insurance, Insurance Distribution, and Legacy Financial Guarantee (LFG) Insurance. The Specialty Property and Casualty Insurance business provides specialty property and casualty program insurance with a focus commercial and personal liability risks. The Insurance Distribution business includes the specialty property and casualty insurance distribution business, which includes managing general agents and underwriters, insurance wholesalers, brokers, and other distribution businesses. The LFG Insurance business offers financial guarantee insurance policies that provide an unconditional and irrevocable guarantee, which protects the holder of a debt obligation against non-payment when due of the principal and interest on the obligations guaranteed. Ambac Financial Group, Inc. was incorporated in 1991 and is headquartered in New York, New York.

About First Acceptance

First Acceptance Corporation, together with its subsidiaries, operates as a retailer, servicer, and underwriter of non-standard personal automobile insurance and related products in the United States. It issues non-standard automobile insurance policies to individuals based on their inability or unwillingness to obtain insurance coverage from standard carriers due to various factors, including their payment preference, failure to maintain continuous insurance coverage, or driving record. The company also underwrites auto and motorcycle insurance products; and renters, homeowners, commercial, pet, life, travel, outdoor vehicle, and hospital indemnity insurance products. In addition, it provides TeleMed, a subscription service that offers access to doctor for consulting, diagnosing, and prescribing medication for non-emergency illness. The company primarily distributes its products through its retail locations, as well as through call center and internet. As of December 31, 2021, it leased and operated 338 retail locations, and a call center. First Acceptance Corporation was founded in 1969 and is headquartered in Nashville, Tennessee.