ARCH CAPITAL GROUP LTD (ACGL)
BMG0450A1053 - Common Stock
Overall ACGL gets a fundamental rating of 6 out of 10. We evaluated ACGL against 140 industry peers in the Insurance industry. While ACGL belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. ACGL is valued quite cheap, while showing a decent growth score. This is a good combination!
1. Profitability
1.1 Basic Checks
In the past year ACGL was profitable.
In the past year ACGL had a positive cash flow from operations.
ACGL had positive earnings in each of the past 5 years.
Each year in the past 5 years ACGL had a positive operating cash flow.
1.2 Ratios
With an excellent Return On Assets value of 7.70%, ACGL belongs to the best of the industry, outperforming 93.53% of the companies in the same industry.
Looking at the Return On Equity, with a value of 25.46%, ACGL belongs to the top of the industry, outperforming 89.93% of the companies in the same industry.
With a decent Return On Invested Capital value of 4.61%, ACGL is doing good in the industry, outperforming 79.86% of the companies in the same industry.
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 4.27%.
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
ACGL has a better Profit Margin (35.09%) than 95.68% of its industry peers.
In the last couple of years the Profit Margin of ACGL has grown nicely.
The Operating Margin of ACGL (26.27%) is better than 86.33% of its industry peers.
In the last couple of years the Operating Margin of ACGL has grown nicely.
| 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.
The number of shares outstanding for ACGL has been increased compared to 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
ACGL has a debt to FCF ratio of 0.41. This is a very positive value and a sign of high solvency as it would only need 0.41 years to pay back of all of its debts.
ACGL has a Debt to FCF ratio of 0.41. This is amongst the best in the industry. ACGL outperforms 87.77% of its industry peers.
ACGL has a Debt/Equity ratio of 0.12. This is a healthy value indicating a solid balance between debt and equity.
ACGL's Debt to Equity ratio of 0.12 is fine compared to the rest of the industry. ACGL outperforms 78.42% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.12 | ||
| Debt/FCF | 0.41 | ||
| Altman-Z | N/A |
ROIC/WACC0.53
WACC8.68%
2.3 Liquidity
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | N/A | ||
| Quick Ratio | N/A |
3. Growth
3.1 Past
ACGL shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 17.28%, which is quite good.
The Earnings Per Share has been growing by 30.84% on average over the past years. This is a very strong growth
The Revenue has grown by 30.27% in the past year. This is a very strong growth!
Measured over the past years, ACGL shows a quite strong growth in Revenue. The Revenue has been growing by 19.58% on average per year.
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
The Earnings Per Share is expected to grow by 5.34% on average over the next years.
The Revenue is expected to grow by 12.74% on average over the next years. This is quite good.
EPS Next Y7.72%
EPS Next 2Y4.48%
EPS Next 3Y5.34%
EPS Next 5YN/A
Revenue Next Year20.61%
Revenue Next 2Y16.64%
Revenue Next 3Y12.74%
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 10.38, 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 65.47% of the companies are valued more expensively.
ACGL is valuated cheaply when we compare the Price/Earnings ratio to 28.65, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 10.69 indicates a reasonable valuation of ACGL.
Based on the Price/Forward Earnings ratio, ACGL is valued a bit cheaper than 60.43% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.56, ACGL is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.38 | ||
| Fwd PE | 10.69 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ACGL is valued a bit cheaper than the industry average as 66.91% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, ACGL is valued a bit cheaper than the industry average as 69.06% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 5.53 | ||
| EV/EBITDA | 8.56 |
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)1.34
PEG (5Y)0.34
EPS Next 2Y4.48%
EPS Next 3Y5.34%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.91%, ACGL is a good candidate for dividend investing.
ACGL's Dividend Yield is rather good when compared to the industry average which is at 4.25. ACGL pays more dividend than 86.33% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.23, ACGL pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.91% |
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
ACGL pays out 0.71% of its income as dividend. This is a sustainable payout ratio.
ACGL's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP0.71%
EPS Next 2Y4.48%
EPS Next 3Y5.34%
ARCH CAPITAL GROUP LTD
NASDAQ:ACGL (11/21/2024, 5:20:00 PM)
After market: 98.59 0 (0%)98.59
+2.88 (+3.01%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap37.09B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.91% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
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Surprises & Revisions
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.38 | ||
| Fwd PE | 10.69 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)1.34
PEG (5Y)0.34
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.7% | ||
| ROE | 25.46% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 26.27% | ||
| PM (TTM) | 35.09% | ||
| GM | N/A | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.22
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.12 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | N/A | ||
| Quick Ratio | N/A | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)17.28%
EPS 3Y84.29%
EPS 5Y
EPS Q2Q%
EPS Next Y7.72%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)30.27%
Revenue growth 3Y16.5%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
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