NasdaqGS:ACGL

Stock Analysis Report

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Executive Summary

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

Rewards

PE ratio (10.9x) is below the US market (19x)

Earnings are forecast to grow 21.62% per year

Risk Analysis

No risks detected for ACGL from our risk checks.


Snowflake Analysis

Adequate balance sheet 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

-0.7%

ACGL

-0.6%

US Insurance

-1.3%

US Market


1 Year Return

-26.9%

ACGL

-12.8%

US Insurance

18.5%

US Market

Return vs Industry: ACGL underperformed the US Insurance industry which returned -12.8% over the past year.

Return vs Market: ACGL underperformed the US Market which returned 18.5% over the past year.


Shareholder returns

ACGLIndustryMarket
7 Day-0.7%-0.6%-1.3%
30 Day4.7%1.9%5.3%
90 Day-3.0%-1.7%7.5%
1 Year-26.9%-26.9%-10.4%-12.8%21.3%18.5%
3 Year-11.1%-11.1%-0.6%-7.8%42.4%32.9%
5 Year16.9%16.9%35.7%18.6%84.2%63.5%

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?

10.89x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: ACGL ($30.26) is trading above our estimate of fair value ($28.24)

Significantly Below Fair Value: ACGL is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: ACGL is good value based on its PE Ratio (10.9x) compared to the US Insurance industry average (14.1x).

PE vs Market: ACGL is good value based on its PE Ratio (10.9x) compared to the US market (19x).


Price to Earnings Growth Ratio

PEG Ratio: ACGL is good value based on its PEG Ratio (0.5x)


Price to Book Ratio

PB vs Industry: ACGL is overvalued based on its PB Ratio (1.1x) compared to the US Insurance industry average (0.9x).


Next Steps

Future Growth

How is Arch Capital Group forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

21.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ACGL's forecast earnings growth (21.6% per year) is above the savings rate (2.2%).

Earnings vs Market: ACGL's earnings (21.6% per year) are forecast to grow slower than the US market (22.2% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: ACGL's revenue (5.2% per year) is forecast to grow slower than the US market (10.1% per year).

High Growth Revenue: ACGL's revenue (5.2% per year) is forecast to grow slower than 20% 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 (9.6%).


Next Steps

Past Performance

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

19.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ACGL has high quality earnings.

Growing Profit Margin: ACGL's current net profit margins (15.4%) are lower than last year (19.8%).


Past Earnings Growth Analysis

Earnings Trend: ACGL's earnings have grown by 19.8% per year over the past 5 years.

Accelerating Growth: ACGL's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: ACGL had negative earnings growth (-9.8%) over the past year, making it difficult to compare to the Insurance industry average (-3.3%).


Return on Equity

High ROE: ACGL's Return on Equity (8.6%) is considered low.


Next Steps

Financial Health

How is Arch Capital Group's financial position?


Financial Position Analysis

Short Term Liabilities: ACGL's short term assets ($14.2B) exceed its short term liabilities ($6.2B).

Long Term Liabilities: ACGL's short term assets ($14.2B) do not cover its long term liabilities ($22.3B).


Debt to Equity History and Analysis

Debt Level: ACGL's debt to equity ratio (28.8%) is considered satisfactory.

Reducing Debt: ACGL's debt to equity ratio has increased from 17.9% to 28.8% over the past 5 years.

Debt Coverage: ACGL's debt is well covered by operating cash flow (72.4%).

Interest Coverage: ACGL's interest payments on its debt are well covered by EBIT (10.6x coverage).


Balance Sheet


Next Steps

Dividend

What is Arch Capital Group 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 recent payouts.

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

2.6yrs

Average management tenure


CEO

Marc Grandisson (52 yo)

2.58yrs

Tenure

US$9,360,029

Compensation

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


CEO Compensation Analysis

Compensation vs Market: Marc's total compensation ($USD9.36M) is about average for companies of similar size in the US market ($USD11.20M).

Compensation vs Earnings: Marc's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Marc Grandisson
President & CEO2.58yrsUS$9.36m0.47%
$ 57.5m
François Morin
Executive VP2.42yrsUS$3.79m0.029%
$ 3.6m
John Vollaro
Senior Advisor & Director10.92yrsUS$829.65k0.11%
$ 14.0m
Nicolas Alain Papadopoulo
CEO of Arch Worldwide & Chief Underwriting Officer of Property & Casualty Operations6.25yrsUS$4.26m0.17%
$ 20.5m
Maamoun Rajeh
Chief Executive Officer of Reinsurance Group6.25yrsUS$4.71m0.076%
$ 9.3m
David Gansberg
Chief Executive Officer of the Global Mortgage Group1.58yrsUS$3.38m0.030%
$ 3.7m
Christopher Hovey
Chief Operations Officer0.75yrno datano data
William Hutchings
Senior VP & Chief Investment Officer15.25yrsUS$1.95m0.11%
$ 12.9m
Donald Watson
Executive Vice President at Financial Services of Arch Capital Services Inc.no datano datano data
Louis Petrillo
General Counselno dataUS$870.96k0.026%
$ 3.3m
Jennifer Centrone
Chief Human Resources Officerno datano datano data
Patrick Nails
Senior VP & General Counsel of Arch Insurance Group Incno datano datano data

2.6yrs

Average Tenure

52.5yo

Average Age

Experienced Management: ACGL's management team is considered experienced (2.6 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
John Vollaro
Senior Advisor & Director10.92yrsUS$829.65k0.11%
$ 14.0m
John Bunce
Independent Director18.92yrsUS$299.55k0.51%
$ 63.2m
Louis Paglia
Independent Director6.25yrsUS$399.45k0.011%
$ 1.4m
Thomas Watjen
Director0.75yrno data0.0032%
$ 394.3k
Eric Doppstadt
Independent Director9.92yrsUS$267.05k0.017%
$ 2.0m
Brian Posner
Independent Director9.92yrsUS$349.55k0.026%
$ 3.1m
John Pasquesi
Independent Chairman of the Board1.08yrsUS$329.05k0.89%
$ 109.8m
Eugene Sunshine
Independent Director6.25yrsUS$322.45k0.0059%
$ 722.3k
Laurie Goodman
Independent Director2.42yrsUS$318.55k0.0062%
$ 755.5k
Gerry Wolfe
Chairman of Arch Insurance Canada5.67yrsno datano data
Moira Kilcoyne
Director0.75yrno data0.0029%
$ 357.5k

6.3yrs

Average Tenure

62yo

Average Age

Experienced Board: ACGL's board of directors are considered experienced (6.3 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold 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$12.285b
  • Shares outstanding: 405.97m
  • 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 insurance, reinsurance, and mortgage insurance products worldwide. The company’s Insurance segment offers primary and excess casualty cover ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/10/21 00:02
End of Day Share Price2020/10/20 00:00
Earnings2020/06/30
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.