NasdaqGS:ACGL

Stock Analysis Report

Executive Summary

Arch Capital Group Ltd., together with its subsidiaries, provides property, casualty, and mortgage insurance and reinsurance products worldwide.


Snowflake Analysis

Solid track record and fair value.


Similar Companies

Share Price & News

How has Arch Capital Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: ACGL has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-1.2%

ACGL

-1.5%

US Insurance

-1.1%

US Market


1 Year Return

46.1%

ACGL

16.1%

US Insurance

17.8%

US Market

Return vs Industry: ACGL exceeded the US Insurance industry which returned 16.3% over the past year.

Return vs Market: ACGL exceeded the US Market which returned 17.9% over the past year.


Shareholder returns

ACGLIndustryMarket
7 Day-1.2%-1.5%-1.1%
30 Day4.7%2.9%1.5%
90 Day12.0%4.3%6.6%
1 Year46.1%46.1%18.9%16.1%20.2%17.8%
3 Year50.2%50.2%34.4%24.1%47.5%38.1%
5 Year137.0%137.0%71.3%50.7%71.2%52.4%

Price Volatility Vs. Market

How volatile is Arch Capital Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Arch Capital Group undervalued compared to its fair value and its price relative to the market?

13.3%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: ACGL ($47.12) is trading below our estimate of fair value ($54.2)

Significantly Below Fair Value: ACGL is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: ACGL is good value based on its PE Ratio (11.9x) compared to the Insurance industry average (13.4x).

PE vs Market: ACGL is good value based on its PE Ratio (11.9x) compared to the US market (18.2x).


Price to Earnings Growth Ratio

PEG Ratio: ACGL's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: ACGL is overvalued based on its PB Ratio (1.8x) compared to the US Insurance industry average (1.1x).


Next Steps

Future Growth

How is Arch Capital Group forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

-5.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ACGL's earnings are forecast to decline over the next 3 years (-5.4% per year).

Earnings vs Market: ACGL's earnings are forecast to decline over the next 3 years (-5.4% per year).

High Growth Earnings: ACGL's earnings are forecast to decline over the next 3 years.

Revenue vs Market: ACGL's revenue is expected to decline over the next 3 years (-0.4% per year).

High Growth Revenue: ACGL's revenue is forecast to decline over the next 3 years (-0.4% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ACGL's Return on Equity is forecast to be low in 3 years time (9.9%).


Next Steps

Past Performance

How has Arch Capital Group performed over the past 5 years?

13.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ACGL has high quality earnings.

Growing Profit Margin: ACGL's current net profit margins (23%) are higher than last year (13.1%).


Past Earnings Growth Analysis

Earnings Trend: ACGL's earnings have grown by 13.7% per year over the past 5 years.

Accelerating Growth: ACGL's earnings growth over the past year (123.5%) exceeds its 5-year average (13.7% per year).

Earnings vs Industry: ACGL earnings growth over the past year (123.5%) exceeded the Insurance industry 32.1%.


Return on Equity

High ROE: ACGL's Return on Equity (13.7%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Arch Capital Group's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: ACGL has a low level of unsold assets or inventory.

Debt Coverage by Assets: ACGL's debt is covered by short term assets (assets are 4.4x debt).


Financial Institutions Analysis

Asset Level: ACGL's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if ACGL has a sufficient allowance for bad loans.

Low Risk Liabilities: ACGL reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if ACGL has an acceptable proportion of non-loan assets held.

Low Risk Deposits: ACGL has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if ACGL has an appropriate level of bad loans.


Next Steps

Dividend

What is Arch Capital Group's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

Notable Dividend: Unable to evaluate ACGL's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate ACGL's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if ACGL's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if ACGL's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of ACGL's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.1yrs

Average management tenure


CEO

Marc Grandisson (51yo)

1.9yrs

Tenure

US$12,884,187

Compensation

Mr. Marc Grandisson has been Chief Executive Officer and President of Arch Capital Group Ltd since March 3, 2018 and has been its Director since March 2018. Mr. Grandisson served as the Chairman and Chief  ...


CEO Compensation Analysis

Compensation vs Market: Marc's total compensation ($USD12.88M) is about average for companies of similar size in the US market ($USD10.81M).

Compensation vs Earnings: Marc's compensation has increased by more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Marc Grandisson
President1.9yrsUS$12.88m0.44% $84.6m
François Morin
Executive VP1.8yrsUS$3.90m0.028% $5.4m
John Vollaro
Senior Advisor & Director10.3yrsUS$882.32k0.11% $21.8m
Nicolas Alain Papadopoulo
Chairman & CEO of Arch Worldwide and Chief Underwriting Officer of Property & Casualty Operations0yrsUS$4.08m0.17% $31.6m
Maamoun Rajeh
Chairman & CEO of Arch Worldwide Reinsurance Group5.6yrsUS$3.79m0.075% $14.3m
William Hutchings
Senior VP & Chief Investment Officer14.6yrsUS$1.95m0.16% $31.1m
Prashant Nema
Group Chief Information Officer0.08yrsno datano data
Carl Sullo
Chief Human Resources Officer of Real Estate & Administrative Services0yrsno datano data
Donald Watson
Executive Vice President at Financial Services of Arch Capital Services Inc.0yrsno datano data
Patrick Nails
Senior VP & General Counsel of Arch Insurance Group Inc0yrsno datano data

2.1yrs

Average Tenure

56yo

Average Age

Experienced Management: ACGL's management team is considered experienced (2.1 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Marc Grandisson
President1.9yrsUS$12.88m0.44% $84.6m
John Vollaro
Senior Advisor & Director10.3yrsUS$882.32k0.11% $21.8m
Nicolas Alain Papadopoulo
Chairman & CEO of Arch Worldwide and Chief Underwriting Officer of Property & Casualty Operations0yrsUS$4.08m0.17% $31.6m
Maamoun Rajeh
Chairman & CEO of Arch Worldwide Reinsurance Group5.6yrsUS$3.79m0.075% $14.3m
John Bunce
Independent Director18.3yrsUS$273.01k0.51% $98.0m
Eric Doppstadt
Independent Director9.3yrsUS$265.51k0.015% $2.9m
Brian Posner
Independent Director9.3yrsUS$349.51k0.023% $4.3m
John Pasquesi
Chairman of the Board & Lead Independent Director0.4yrsUS$329.01k0.89% $170.2m
Eugene Sunshine
Independent Director5.6yrsUS$317.83k0.0046% $885.2k
Gerry Wolfe
Chairman of Arch Insurance Canada5yrsno datano data

5.6yrs

Average Tenure

59.5yo

Average Age

Experienced Board: ACGL's board of directors are considered experienced (5.6 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: ACGL insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Arch Capital Group Ltd.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Arch Capital Group Ltd.
  • Ticker: ACGL
  • Exchange: NasdaqGS
  • Founded: 1995
  • Industry: Property and Casualty Insurance
  • Sector: Insurance
  • Market Cap: US$19.036b
  • Shares outstanding: 404.00m
  • Website: https://www.archcapgroup.com

Number of Employees


Location

  • Arch Capital Group Ltd.
  • Waterloo House
  • Ground Floor
  • Pembroke
  • HM 08
  • Bermuda

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ACGLNasdaqGS (Nasdaq Global Select)YesCommon SharesUSUSDSep 1995
RSKDB (Deutsche Boerse AG)YesCommon SharesDEEURSep 1995
ARH PRACLNYSE (New York Stock Exchange)PFD SER AUSUSDApr 2006
ARH PRBCLNYSE (New York Stock Exchange)PFD SER BUSUSDMay 2006
ACGL.PNasdaqGS (Nasdaq Global Select)DSHS 1/1000 EUSUSDSep 2016
ACGL.ONasdaqGS (Nasdaq Global Select)5.45% PFD SER FUSUSDAug 2017

Biography

Arch Capital Group Ltd., together with its subsidiaries, provides property, casualty, and mortgage insurance and reinsurance products worldwide. The company’s Insurance segment offers primary and excess casualty coverages; loss sensitive primary casualty insurance programs; collateral protection, debt cancellation, and service contract reimbursement products; directors’ and officers’ liability, errors and omissions liability, employment practices and fiduciary liability, crime, professional indemnity, and other financial related coverages; medical professional and general liability insurance coverages; and workers’ compensation and umbrella liability, as well as commercial automobile and inland marine products. It also provides property, energy, marine, and aviation insurance; travel insurance; accident, disability, and medical plan insurance coverages; captive insurance programs; employers’ liability insurance coverages; and contract and commercial surety coverages. This segment markets its products through a group of licensed independent retail and wholesale brokers. Its Reinsurance segment provides reinsurance for third party liability and workers’ compensation exposures; marine and aviation reinsurance; surety, accident and health, workers’ compensation catastrophe, agriculture, trade credit, and political risk products; reinsurance protection for catastrophic losses and commercial property risks; life reinsurance; casualty clash; and risk management solutions. This segment markets its reinsurance products through brokers, and directly to ceding companies. The company’s Mortgage segment offers private mortgage insurance covering one-to-four family residential mortgages; mortgage insurance to cover previously originated residential loans; quota share reinsurance; and risk-sharing products. This segment sells its products through direct basis and through brokers to mortgage originators. The company was founded in 1995 and is based in Pembroke, Bermuda. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/24 00:29
End of Day Share Price2020/02/21 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.