ARCH CAPITAL GROUP LTD (ACGL) Stock Fundamental Analysis
USA - NASDAQ:ACGL - BMG0450A1053 - Common Stock
87.15 USD
-0.31 (-0.35%)
87.2 USD
+0.05 (+0.06%)
Taking everything into account, ACGL scores 5 out of 10 in our fundamental rating. ACGL was compared to 147 industry peers in the Insurance industry. ACGL has an average financial health and profitability rating. 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.
Each year in the past 5 years ACGL had a positive operating cash flow.
1.2 Ratios
The Return On Assets of ACGL (4.69%) is better than 83.67% of its industry peers.
ACGL has a Return On Equity of 16.03%. This is in the better half of the industry: ACGL outperforms 74.83% of its industry peers.
The Return On Invested Capital of ACGL (3.80%) is better than 67.35% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for ACGL is in line with the industry average of 4.46%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.69% | ||
| ROE | 16.03% | ||
| ROIC | 3.8% |
ROA(3y)5.5%
ROA(5y)4.86%
ROE(3y)18.54%
ROE(5y)16.3%
ROIC(3y)3.89%
ROIC(5y)3.58%
1.3 Margins
With an excellent Profit Margin value of 19.83%, ACGL belongs to the best of the industry, outperforming 90.48% of the companies in the same industry.
In the last couple of years the Profit Margin of ACGL has grown nicely.
With a decent Operating Margin value of 20.17%, ACGL is doing good in the industry, outperforming 77.55% of the companies in the same industry.
In the last couple of years the Operating Margin of ACGL has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 20.17% | ||
| PM (TTM) | 19.83% | ||
| GM | N/A |
OM growth 3Y4.67%
OM growth 5Y-2.93%
PM growth 3Y2.45%
PM growth 5Y1.58%
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
ACGL has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
ACGL has more shares outstanding than it did 1 year ago.
The number of shares outstanding for ACGL has been reduced compared to 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 0.45. This is a very positive value and a sign of high solvency as it would only need 0.45 years to pay back of all of its debts.
The Debt to FCF ratio of ACGL (0.45) is better than 80.27% 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 has a better Debt to Equity ratio (0.12) than 74.15% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.12 | ||
| Debt/FCF | 0.45 | ||
| Altman-Z | N/A |
ROIC/WACC0.46
WACC8.27%
2.3 Liquidity
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | N/A | ||
| Quick Ratio | N/A |
3. Growth
3.1 Past
The earnings per share for ACGL have decreased strongly by -14.77% in the last year.
ACGL shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 26.96% yearly.
Looking at the last year, ACGL shows a very strong growth in Revenue. The Revenue has grown by 24.70%.
The Revenue has been growing by 19.89% on average over the past years. This is quite good.
EPS 1Y (TTM)-14.77%
EPS 3Y37.06%
EPS 5Y26.96%
EPS Q2Q%0.39%
Revenue 1Y (TTM)24.7%
Revenue growth 3Y23.81%
Revenue growth 5Y19.89%
Sales Q2Q%15%
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 2.81% on average per year.
The Revenue is expected to grow by 6.80% on average over the next years.
EPS Next Y-11.28%
EPS Next 2Y0.63%
EPS Next 3Y2.81%
EPS Next 5YN/A
Revenue Next Year9.66%
Revenue Next 2Y7.72%
Revenue Next 3Y6.8%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 10.41, the valuation of ACGL can be described as reasonable.
ACGL's Price/Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Earnings ratio of 26.91, ACGL is valued rather cheaply.
The Price/Forward Earnings ratio is 9.28, which indicates a very decent valuation of ACGL.
Based on the Price/Forward Earnings ratio, ACGL is valued a bit cheaper than the industry average as 61.22% of the companies are valued more expensively.
ACGL is valuated cheaply when we compare the Price/Forward Earnings ratio to 22.92, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.41 | ||
| Fwd PE | 9.28 |
4.2 Price Multiples
ACGL's Enterprise Value to EBITDA ratio is in line with the industry average.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ACGL indicates a somewhat cheap valuation: ACGL is cheaper than 72.79% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 5.31 | ||
| EV/EBITDA | 8.51 |
4.3 Compensation for Growth
The decent profitability rating of ACGL may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.39
EPS Next 2Y0.63%
EPS Next 3Y2.81%
5. Dividend
5.1 Amount
ACGL has a Yearly Dividend Yield of 5.74%, which is a nice return.
Compared to an average industry Dividend Yield of 3.27, ACGL pays a better dividend. On top of this ACGL pays more dividend than 91.16% 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 2.32.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.74% |
5.2 History
The dividend of ACGL is nicely growing with an annual growth rate of 118.11%!
ACGL does not have a reliable dividend history as it only pays dividend since a couple or years.
Dividend Growth(5Y)118.11%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
ACGL pays out 51.79% of its income as dividend. This is a bit on the high side, but may be sustainable.
The dividend of ACGL is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP51.79%
EPS Next 2Y0.63%
EPS Next 3Y2.81%
87.15
-0.31 (-0.35%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners94.19%
Inst Owner Change0.03%
Ins Owners3.14%
Ins Owner Change0.4%
Market Cap32.53B
Revenue(TTM)18.63B
Net Income(TTM)3.69B
Analysts76.67
Price Target110.36 (26.63%)
Short Float %1.51%
Short Ratio2.69
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.74% |
Yearly Dividend5.08
Dividend Growth(5Y)118.11%
DP51.79%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)11.67%
Min EPS beat(2)9.27%
Max EPS beat(2)14.08%
EPS beat(4)3
Avg EPS beat(4)11.13%
Min EPS beat(4)-0.36%
Max EPS beat(4)21.52%
EPS beat(8)7
Avg EPS beat(8)16.8%
EPS beat(12)11
Avg EPS beat(12)24.14%
EPS beat(16)15
Avg EPS beat(16)27.55%
Revenue beat(2)0
Avg Revenue beat(2)-4.12%
Min Revenue beat(2)-6.02%
Max Revenue beat(2)-2.23%
Revenue beat(4)1
Avg Revenue beat(4)-2.72%
Min Revenue beat(4)-6.02%
Max Revenue beat(4)1.66%
Revenue beat(8)4
Avg Revenue beat(8)-0.96%
Revenue beat(12)7
Avg Revenue beat(12)1.68%
Revenue beat(16)8
Avg Revenue beat(16)-1.23%
PT rev (1m)0%
PT rev (3m)-3.53%
EPS NQ rev (1m)20.44%
EPS NQ rev (3m)24.36%
EPS NY rev (1m)-0.3%
EPS NY rev (3m)3.15%
Revenue NQ rev (1m)1.43%
Revenue NQ rev (3m)-0.02%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.49%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.41 | ||
| Fwd PE | 9.28 | ||
| P/S | 1.75 | ||
| P/FCF | 5.31 | ||
| P/OCF | 5.27 | ||
| P/B | 1.41 | ||
| P/tB | 1.5 | ||
| EV/EBITDA | 8.51 |
EPS(TTM)8.37
EY9.6%
EPS(NY)9.39
Fwd EY10.77%
FCF(TTM)16.42
FCFY18.84%
OCF(TTM)16.54
OCFY18.98%
SpS49.91
BVpS61.74
TBVpS58.2
PEG (NY)N/A
PEG (5Y)0.39
Graham Number107.83
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.69% | ||
| ROE | 16.03% | ||
| ROCE | 4.81% | ||
| ROIC | 3.8% | ||
| ROICexc | 3.85% | ||
| ROICexgc | 5.18% | ||
| OM | 20.17% | ||
| PM (TTM) | 19.83% | ||
| GM | N/A | ||
| FCFM | 32.89% |
ROA(3y)5.5%
ROA(5y)4.86%
ROE(3y)18.54%
ROE(5y)16.3%
ROIC(3y)3.89%
ROIC(5y)3.58%
ROICexc(3y)3.95%
ROICexc(5y)3.65%
ROICexgc(3y)5.27%
ROICexgc(5y)4.8%
ROCE(3y)4.92%
ROCE(5y)4.54%
ROICexgc growth 3Y12.01%
ROICexgc growth 5Y3.19%
ROICexc growth 3Y11.28%
ROICexc growth 5Y2.52%
OM growth 3Y4.67%
OM growth 5Y-2.93%
PM growth 3Y2.45%
PM growth 5Y1.58%
GM growth 3YN/A
GM growth 5YN/A
F-Score6
Asset Turnover0.24
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.12 | ||
| Debt/FCF | 0.45 | ||
| Debt/EBITDA | 0.68 | ||
| Cap/Depr | 16.2% | ||
| Cap/Sales | 0.25% | ||
| Interest Coverage | 29.35 | ||
| Cash Conversion | 152.76% | ||
| Profit Quality | 165.86% | ||
| Current Ratio | N/A | ||
| Quick Ratio | N/A | ||
| Altman-Z | N/A |
F-Score6
WACC8.27%
ROIC/WACC0.46
Cap/Depr(3y)41.7%
Cap/Depr(5y)46.55%
Cap/Sales(3y)0.41%
Cap/Sales(5y)0.43%
Profit Quality(3y)182.15%
Profit Quality(5y)183.38%
High Growth Momentum
Growth
EPS 1Y (TTM)-14.77%
EPS 3Y37.06%
EPS 5Y26.96%
EPS Q2Q%0.39%
EPS Next Y-11.28%
EPS Next 2Y0.63%
EPS Next 3Y2.81%
EPS Next 5YN/A
Revenue 1Y (TTM)24.7%
Revenue growth 3Y23.81%
Revenue growth 5Y19.89%
Sales Q2Q%15%
Revenue Next Year9.66%
Revenue Next 2Y7.72%
Revenue Next 3Y6.8%
Revenue Next 5YN/A
EBIT growth 1Y-6.59%
EBIT growth 3Y29.6%
EBIT growth 5Y16.38%
EBIT Next YearN/A
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y38.58%
FCF growth 3Y25.05%
FCF growth 5Y26.92%
OCF growth 1Y37.94%
OCF growth 3Y24.87%
OCF growth 5Y26.64%
ARCH CAPITAL GROUP LTD / ACGL FAQ
What is the fundamental rating for ACGL stock?
ChartMill assigns a fundamental rating of 5 / 10 to ACGL.
What is the valuation status for ACGL stock?
ChartMill assigns a valuation rating of 5 / 10 to ARCH CAPITAL GROUP LTD (ACGL). This can be considered as Fairly Valued.
How profitable is ARCH CAPITAL GROUP LTD (ACGL) stock?
ARCH CAPITAL GROUP LTD (ACGL) has a profitability rating of 6 / 10.
What are the PE and PB ratios of ARCH CAPITAL GROUP LTD (ACGL) stock?
The Price/Earnings (PE) ratio for ARCH CAPITAL GROUP LTD (ACGL) is 10.41 and the Price/Book (PB) ratio is 1.41.
Is the dividend of ARCH CAPITAL GROUP LTD sustainable?
The dividend rating of ARCH CAPITAL GROUP LTD (ACGL) is 5 / 10 and the dividend payout ratio is 51.79%.