NYSE:AGO

Stock Analysis Report

Executive Summary

Assured Guaranty Ltd., through its subsidiaries, provides credit protection products to public finance, infrastructure, and structured finance markets in the United States and internationally.

Rewards

Trading at 56.4% below its fair value

Pays a high and reliable dividend of 1.54%

Risk Analysis

Earnings are forecast to decline by an average of -8% per year for the next 3 years



Snowflake Analysis

Undervalued established dividend payer.


Similar Companies

Share Price & News

How has Assured Guaranty's share price performed over time and what events caused price changes?


Latest Share Price and Events

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


Market Performance


7 Day Return

-0.3%

AGO

1.0%

US Insurance

1.8%

US Market


1 Year Return

14.3%

AGO

19.2%

US Insurance

20.1%

US Market

Return vs Industry: AGO underperformed the US Insurance industry which returned 19.2% over the past year.

Return vs Market: AGO underperformed the US Market which returned 20.1% over the past year.


Shareholder returns

AGOIndustryMarket
7 Day-0.3%1.0%1.8%
30 Day-5.2%3.6%1.4%
90 Day-4.0%6.9%8.8%
1 Year16.2%14.3%22.1%19.2%22.7%20.1%
3 Year19.5%13.9%37.3%26.8%50.1%40.4%
5 Year91.7%77.1%73.4%52.7%72.9%53.9%

Price Volatility Vs. Market

How volatile is Assured Guaranty's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Assured Guaranty undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: AGO ($46.73) is trading below our estimate of fair value ($107.2)

Significantly Below Fair Value: AGO is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: AGO is good value based on its PE Ratio (13.5x) compared to the Insurance industry average (14x).

PE vs Market: AGO is good value based on its PE Ratio (13.5x) compared to the US market (18.3x).


Price to Earnings Growth Ratio

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


Price to Book Ratio

PB vs Industry: AGO is good value based on its PB Ratio (0.7x) compared to the US Insurance industry average (1.1x).


Next Steps

Future Growth

How is Assured Guaranty forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

-8.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: AGO's earnings are forecast to decline over the next 3 years (-8% per year).

Earnings vs Market: AGO's earnings are forecast to decline over the next 3 years (-8% per year).

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

Revenue vs Market: AGO's revenue is expected to decline over the next 3 years (-4.5% per year).

High Growth Revenue: AGO's revenue is forecast to decline over the next 3 years (-4.5% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: AGO's Return on Equity is forecast to be low in 3 years time (4.7%).


Next Steps

Past Performance

How has Assured Guaranty performed over the past 5 years?

-20.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: AGO has high quality earnings.

Growing Profit Margin: AGO's current net profit margins (38.8%) are lower than last year (43.9%).


Past Earnings Growth Analysis

Earnings Trend: AGO's earnings have declined by -20% per year over the past 5 years.

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

Earnings vs Industry: AGO had negative earnings growth (-27.1%) over the past year, making it difficult to compare to the Insurance industry average (19.8%).


Return on Equity

High ROE: AGO's Return on Equity (5.3%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Assured Guaranty'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: AGO has a low level of unsold assets or inventory.

Debt Coverage by Assets: AGO's debt is covered by short term assets (assets are 2.5x debt).


Financial Institutions Analysis

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

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

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

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

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

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


Next Steps

Dividend

What is Assured Guaranty's current dividend yield, its reliability and sustainability?

1.54%

Current Dividend Yield


Dividend Yield vs Market

company1.5%marketbottom25%1.4%markettop25%3.7%industryaverage2.2%forecastin3Years1.7%

Current dividend yield vs market & industry

Notable Dividend: AGO's dividend (1.54%) is higher than the bottom 25% of dividend payers in the US market (1.44%).

High Dividend: AGO's dividend (1.54%) is low compared to the top 25% of dividend payers in the US market (3.68%).


Stability and Growth of Payments

Stable Dividend: AGO's dividends per share have been stable in the past 10 years.

Growing Dividend: AGO's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (20.2%), AGO's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: AGO's dividends in 3 years are forecast to be well covered by earnings (21.8% payout ratio).


Next Steps

Management

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

8.7yrs

Average management tenure


CEO

Dominic Frederico (66yo)

16.2yrs

Tenure

US$12,771,902

Compensation

Mr. Dominic John Frederico is the President and Chief Executive Officer of Assured Guaranty Ltd. since December 2003 and serves as its Deputy Chairman. Mr. Frederico serves as the Chief Executive Officer a ...


CEO Compensation Analysis

Compensation vs Market: Dominic's total compensation ($USD12.77M) is above average for companies of similar size in the US market ($USD4.89M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Dominic Frederico
Deputy Chairman16.2yrsUS$12.77m1.74% $77.6m
Robert Bailenson
CFO & Chief Accounting Officer8.7yrsUS$4.76m0.19% $8.4m
Gon Chow
General Counsel & Secretary2.1yrsUS$3.60m0.048% $2.1m
Russell Brewer
Chief Surveillance Officer10.3yrsUS$3.71m0.17% $7.5m
Bruce Stern
Senior Advisor to the CEO0.08yrsUS$2.89m0.18% $8.0m
Andrew Feldstein
Chief Investment Officer & Head of Asset Management1.1yrsno data0.50% $22.3m
Kurt Vandenberg
Chief Information Officer0yrsno datano data
Robert Tucker
Senior Managing Director of Investor Relations & Corporate Communications8.7yrsno datano data
Ivana Grillo
Managing Director of Human Resources0yrsno datano data
Howard Albert
Chief Risk Officer16.1yrsUS$972.91k0.20% $8.7m

8.7yrs

Average Tenure

59yo

Average Age

Experienced Management: AGO's management team is seasoned and experienced (8.7 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Dominic Frederico
Deputy Chairman16.2yrsUS$12.77m1.74% $77.6m
Francisco Borges
Independent Chairman of the Board4.8yrsUS$507.55k0.25% $11.0m
Patrick Kenny
Independent Director15.8yrsUS$332.33k0.067% $3.0m
Thomas Jones
Independent Director4.5yrsUS$320.57k0.023% $1.0m
Alan Kreczko
Independent Director4.5yrsUS$321.10k0.037% $1.7m
Simon Leathes
Independent Director6.8yrsUS$385.85k0.019% $868.7k
George Buhl
Independent Director15.8yrsUS$334.33k0.061% $2.7m
Michael O'Kane
Independent Director14.5yrsUS$325.86k0.064% $2.8m
Bonnie Howard
Independent Director7.5yrsUS$330.78k0.034% $1.5m
Yukiko Omura
Independent Director5.8yrsUS$295.00k0.016% $708.8k

6.8yrs

Average Tenure

69yo

Average Age

Experienced Board: AGO's board of directors are considered experienced (6.8 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: AGO 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

Assured Guaranty Ltd.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Assured Guaranty Ltd.
  • Ticker: AGO
  • Exchange: NYSE
  • Founded: 2003
  • Industry: Property and Casualty Insurance
  • Sector: Insurance
  • Market Cap: US$4.455b
  • Shares outstanding: 95.33m
  • Website: https://www.assuredguaranty.com

Number of Employees


Location

  • Assured Guaranty Ltd.
  • 30 Woodbourne Avenue
  • Hamilton
  • HM 08
  • Bermuda

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
AGONYSE (New York Stock Exchange)YesCommon StockUSUSDApr 2004
DHUDB (Deutsche Boerse AG)YesCommon StockDEEURApr 2004
AGO NBMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNApr 2004

Biography

Assured Guaranty Ltd., through its subsidiaries, provides credit protection products to public finance, infrastructure, and structured finance markets in the United States and internationally. It offers financial guaranty insurance that protects holders of debt instruments and other monetary obligations from defaults in scheduled payments. The company insures various debt obligations, including bonds issued by the United States state or municipal governmental authorities; and notes issued to finance infrastructure projects. It also insures and reinsures various types of the U.S. public finance obligations, such as general obligation, tax-backed, municipal utility, transportation, healthcare, higher education, infrastructure, housing revenue, investor-owned utility, and other public finance bonds; and various types of non-United States public finance obligations comprising infrastructure finance, regulated utilities, pooled infrastructure, and other public finance obligations. In addition, the company insures and reinsures various types of the U.S. and non-U.S. Structured finance obligations, including pooled corporate obligations, residential mortgage-backed securities, insurance securitization obligations, consumer receivables securities, financial products, commercial receivables securities, and other structured finance securities. It markets its financial guaranty insurance directly to issuers and underwriters of public finance and structured finance securities, as well as to investors in such obligations. The company was founded in 2003 and is headquartered in Hamilton, Bermuda. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/16 01:10
End of Day Share Price2020/02/14 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


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.