Reviewing Arch Capital Group (NASDAQ:ACGL) & Hippo (NYSE:HIPO)

Arch Capital Group (NASDAQ:ACGL) and Hippo (NYSE:HIPO) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, dividends, valuation and analyst recommendations.

Profitability

This table compares Arch Capital Group and Hippo’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Arch Capital Group	35.19%	21.42%	6.21%
Hippo	-57.80%	-46.46%	-11.11%

Volatility and Risk

Arch Capital Group has a beta of 0.59, meaning that its stock price is 41% less volatile than the S&P 500. Comparatively, Hippo has a beta of 1.35, meaning that its stock price is 35% more volatile than the S&P 500.

Institutional and Insider Ownership

89.1% of Arch Capital Group shares are owned by institutional investors. Comparatively, 43.0% of Hippo shares are owned by institutional investors. 4.2% of Arch Capital Group shares are owned by company insiders. Comparatively, 11.4% of Hippo shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Arch Capital Group and Hippo”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Arch Capital Group	$15.02 billion	2.84	$4.44 billion	$12.67	8.98
Hippo	$209.70 million	2.05	-$273.10 million	($10.08)	-1.72

Arch Capital Group has higher revenue and earnings than Hippo. Hippo is trading at a lower price-to-earnings ratio than Arch Capital Group, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings for Arch Capital Group and Hippo, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Arch Capital Group	0	4	10	0	2.71
Hippo	0	2	1	0	2.33

Arch Capital Group presently has a consensus price target of $113.73, indicating a potential downside of 0.01%. Hippo has a consensus price target of $19.00, indicating a potential upside of 9.89%. Given Hippo’s higher probable upside, analysts plainly believe Hippo is more favorable than Arch Capital Group.

Summary

Arch Capital Group beats Hippo on 11 of the 14 factors compared between the two stocks.

About Arch Capital Group

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 coverages; loss sensitive primary casualty insurance programs; 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; employer's liability; contract and commercial surety coverages; and collateral protection, debt cancellation, and service contract reimbursement products. This segment markets its products through a group of licensed independent retail and wholesale brokers. Its Reinsurance segment provides casualty reinsurance for third party liability exposures; marine and aviation; motor reinsurance, whole account multi-line treaties, cyber, trade credit, surety, accident and health, workers' compensation catastrophe, agriculture, trade credit, and political risk products; reinsurance protection for catastrophic losses, and personal lines and commercial property exposures; life reinsurance; casualty clash; and risk management solutions. This segment markets its reinsurance products through brokers. The company's Mortgage segment offers direct mortgage insurance and mortgage reinsurance. The company was founded in 1995 and is based in Pembroke, Bermuda.

About Hippo

Hippo Holdings Inc. provides property and casualty insurance products to individuals and business customers primarily in the United States. The company operates through three segments: Services, Insurance-as-a-Service, and Hippo Home Insurance Program. Its insurance products include homeowners' insurance against risks of fire, wind, and theft, as well as other personal lines policies from third party carriers; and personal and commercial, as well as home, auto, cyber, small business, life, specialty lines, and other insurance products. The company distributes insurance products and services through its technology platform and website, as well as operates licensed insurance agencies. Hippo Holdings Inc. is headquartered in Palo Alto, California.