ARCH CAPITAL GROUP LTD (ACGL) Stock Fundamental Analysis
NASDAQ:ACGL - Nasdaq - BMG0450A1053 - Common Stock
ACGL gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 143 industry peers in the Insurance industry. ACGL has an excellent profitability rating, but there are some minor concerns on its financial health. ACGL has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
ACGL had positive earnings in the past year.
In the past year ACGL had a positive cash flow from operations.
In the past 5 years ACGL has always been profitable.
ACGL had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 7.70%, ACGL belongs to the top of the industry, outperforming 91.49% of the companies in the same industry.
With an excellent Return On Equity value of 25.46%, ACGL belongs to the best of the industry, outperforming 86.52% of the companies in the same industry.
ACGL has a Return On Invested Capital of 4.61%. This is in the better half of the industry: ACGL outperforms 76.60% of its industry peers.
ACGL had an Average Return On Invested Capital over the past 3 years of 3.48%. This is in line with the industry average of 4.61%.
The 3 year average ROIC (3.48%) for ACGL is below the current ROIC(4.61%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.7% | ||
| ROE | 25.46% | ||
| ROIC | 4.61% |
ROA(3y)5.04%
ROA(5y)4.49%
ROE(3y)16.86%
ROE(5y)14.97%
ROIC(3y)3.48%
ROIC(5y)3.47%
1.3 Margins
With an excellent Profit Margin value of 35.09%, ACGL belongs to the best of the industry, outperforming 95.04% of the companies in the same industry.
ACGL's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 26.27%, ACGL belongs to the top of the industry, outperforming 87.23% of the companies in the same industry.
ACGL's Operating Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 26.27% | ||
| PM (TTM) | 35.09% | ||
| GM | N/A |
OM growth 3Y6.85%
OM growth 5Y8.62%
PM growth 3Y26.86%
PM growth 5Y20.34%
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), ACGL is destroying value.
ACGL has more shares outstanding than it did 1 year ago.
ACGL has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, ACGL has an improved debt to assets ratio.
2.2 Solvency
The Debt to FCF ratio of ACGL is 0.41, which is an excellent value as it means it would take ACGL, only 0.41 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 0.41, ACGL belongs to the top of the industry, outperforming 86.52% of the companies in the same industry.
A Debt/Equity ratio of 0.12 indicates that ACGL is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.12, ACGL is in the better half of the industry, outperforming 77.31% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.12 | ||
| Debt/FCF | 0.41 | ||
| Altman-Z | N/A |
ROIC/WACC0.52
WACC8.85%
2.3 Liquidity
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | N/A | ||
| Quick Ratio | N/A |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 17.28% over the past year.
Measured over the past years, ACGL shows a very strong growth in Earnings Per Share. The EPS has been growing by 30.84% on average per year.
Looking at the last year, ACGL shows a very strong growth in Revenue. The Revenue has grown by 30.27%.
The Revenue has been growing by 19.58% on average over the past years. This is quite good.
EPS 1Y (TTM)17.28%
EPS 3Y84.29%
EPS 5Y30.84%
EPS Q2Q%-13.85%
Revenue 1Y (TTM)30.27%
Revenue growth 3Y16.5%
Revenue growth 5Y19.58%
Sales Q2Q%20.63%
3.2 Future
Based on estimates for the next years, ACGL will show a small growth in Earnings Per Share. The EPS will grow by 5.38% on average per year.
ACGL is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 13.38% yearly.
EPS Next Y7.33%
EPS Next 2Y4.25%
EPS Next 3Y5.38%
EPS Next 5YN/A
Revenue Next Year21.57%
Revenue Next 2Y16.96%
Revenue Next 3Y13.38%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 9.99, the valuation of ACGL can be described as very reasonable.
Based on the Price/Earnings ratio, ACGL is valued a bit cheaper than the industry average as 65.96% of the companies are valued more expensively.
ACGL's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 28.29.
ACGL is valuated reasonably with a Price/Forward Earnings ratio of 10.33.
ACGL's Price/Forward Earnings is on the same level as the industry average.
The average S&P500 Price/Forward Earnings ratio is at 24.44. ACGL is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.99 | ||
| Fwd PE | 10.33 |
4.2 Price Multiples
ACGL's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. ACGL is cheaper than 63.83% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ACGL indicates a somewhat cheap valuation: ACGL is cheaper than 68.79% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 5.32 | ||
| EV/EBITDA | 8.49 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The excellent profitability rating of ACGL may justify a higher PE ratio.
PEG (NY)1.36
PEG (5Y)0.32
EPS Next 2Y4.25%
EPS Next 3Y5.38%
5. Dividend
5.1 Amount
ACGL has a Yearly Dividend Yield of 5.24%, which is a nice return.
Compared to an average industry Dividend Yield of 2.99, ACGL pays a better dividend. On top of this ACGL pays more dividend than 88.65% of the companies listed in the same industry.
ACGL's Dividend Yield is rather good when compared to the S&P500 average which is at 2.28.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.24% |
5.2 History
The dividend of ACGL has a limited annual growth rate of 0.55%.
ACGL does not have a reliable dividend history as it only pays dividend since a couple or years.
Dividend Growth(5Y)0.55%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
0.71% of the earnings are spent on dividend by ACGL. This is a low number and sustainable payout ratio.
ACGL's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP0.71%
EPS Next 2Y4.25%
EPS Next 3Y5.38%
ARCH CAPITAL GROUP LTD
NASDAQ:ACGL (1/21/2025, 8:00:00 PM)
After market: 94.88 0 (0%)94.88
-0.63 (-0.66%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners89.4%
Inst Owner Change-0.23%
Ins Owners3.04%
Ins Owner Change5.17%
Market Cap35.70B
Analysts80.87
Price Target123.49 (30.15%)
Short Float %1.65%
Short Ratio3.03
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.24% |
Yearly Dividend0.11
Dividend Growth(5Y)0.55%
DP0.71%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)6.87%
Min EPS beat(2)-0.36%
Max EPS beat(2)14.1%
EPS beat(4)3
Avg EPS beat(4)12.16%
Min EPS beat(4)-0.36%
Max EPS beat(4)20.43%
EPS beat(8)7
Avg EPS beat(8)22.8%
EPS beat(12)11
Avg EPS beat(12)24.34%
EPS beat(16)15
Avg EPS beat(16)30.27%
Revenue beat(2)1
Avg Revenue beat(2)-2.21%
Min Revenue beat(2)-6.09%
Max Revenue beat(2)1.66%
Revenue beat(4)3
Avg Revenue beat(4)0.1%
Min Revenue beat(4)-6.09%
Max Revenue beat(4)4.53%
Revenue beat(8)7
Avg Revenue beat(8)4.19%
Revenue beat(12)8
Avg Revenue beat(12)0.41%
Revenue beat(16)10
Avg Revenue beat(16)3.93%
PT rev (1m)0%
PT rev (3m)4.25%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-13.05%
EPS NY rev (1m)0%
EPS NY rev (3m)-1.32%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)7.52%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.09%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.99 | ||
| Fwd PE | 10.33 | ||
| P/S | 2.21 | ||
| P/FCF | 5.32 | ||
| P/OCF | 5.28 | ||
| P/B | 1.6 | ||
| P/tB | 1.72 | ||
| EV/EBITDA | 8.49 |
EPS(TTM)9.5
EY10.01%
EPS(NY)9.18
Fwd EY9.68%
FCF(TTM)17.84
FCFY18.8%
OCF(TTM)17.98
OCFY18.95%
SpS42.95
BVpS59.2
TBVpS55.25
PEG (NY)1.36
PEG (5Y)0.32
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.7% | ||
| ROE | 25.46% | ||
| ROCE | 5.84% | ||
| ROIC | 4.61% | ||
| ROICexc | 4.68% | ||
| ROICexgc | 6.31% | ||
| OM | 26.27% | ||
| PM (TTM) | 35.09% | ||
| GM | N/A | ||
| FCFM | 41.53% |
ROA(3y)5.04%
ROA(5y)4.49%
ROE(3y)16.86%
ROE(5y)14.97%
ROIC(3y)3.48%
ROIC(5y)3.47%
ROICexc(3y)3.54%
ROICexc(5y)3.54%
ROICexgc(3y)4.69%
ROICexgc(5y)4.63%
ROCE(3y)4.4%
ROCE(5y)4.4%
ROICexcg growth 3Y14.3%
ROICexcg growth 5Y16.7%
ROICexc growth 3Y12.07%
ROICexc growth 5Y15.11%
OM growth 3Y6.85%
OM growth 5Y8.62%
PM growth 3Y26.86%
PM growth 5Y20.34%
GM growth 3YN/A
GM growth 5YN/A
F-Score8
Asset Turnover0.22
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.12 | ||
| Debt/FCF | 0.41 | ||
| Debt/EBITDA | 0.62 | ||
| Cap/Depr | 33.13% | ||
| Cap/Sales | 0.33% | ||
| Interest Coverage | 33.43 | ||
| Cash Conversion | 153.54% | ||
| Profit Quality | 118.36% | ||
| Current Ratio | N/A | ||
| Quick Ratio | N/A | ||
| Altman-Z | N/A |
F-Score8
WACC8.85%
ROIC/WACC0.52
Cap/Depr(3y)51.1%
Cap/Depr(5y)51.43%
Cap/Sales(3y)0.46%
Cap/Sales(5y)0.48%
Profit Quality(3y)184.4%
Profit Quality(5y)177.6%
High Growth Momentum
Growth
EPS 1Y (TTM)17.28%
EPS 3Y84.29%
EPS 5Y30.84%
EPS Q2Q%-13.85%
EPS Next Y7.33%
EPS Next 2Y4.25%
EPS Next 3Y5.38%
EPS Next 5YN/A
Revenue 1Y (TTM)30.27%
Revenue growth 3Y16.5%
Revenue growth 5Y19.58%
Sales Q2Q%20.63%
Revenue Next Year21.57%
Revenue Next 2Y16.96%
Revenue Next 3Y13.38%
Revenue Next 5YN/A
EBIT growth 1Y42.88%
EBIT growth 3Y24.49%
EBIT growth 5Y29.89%
EBIT Next YearN/A
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y87.05%
FCF growth 3Y26.02%
FCF growth 5Y30.08%
OCF growth 1Y86.17%
OCF growth 3Y25.82%
OCF growth 5Y29.82%