ARCH CAPITAL GROUP LTD (ACGL) Stock Fundamental Analysis
USA - NASDAQ:ACGL - BMG0450A1053 - Common Stock
89.57 USD
+1.81 (+2.06%)
89.57 USD
0 (0%)
Taking everything into account, ACGL scores 5 out of 10 in our fundamental rating. ACGL was compared to 146 industry peers in the Insurance industry. ACGL has only an average score on both its financial health and profitability. ACGL has a decent growth rate and is not valued too expensively.
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.
Each year in the past 5 years ACGL has been profitable.
ACGL had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
ACGL has a Return On Assets of 4.69%. This is amongst the best in the industry. ACGL outperforms 82.88% of its industry peers.
ACGL's Return On Equity of 16.03% is fine compared to the rest of the industry. ACGL outperforms 73.97% of its industry peers.
ACGL's Return On Invested Capital of 3.80% is fine compared to the rest of the industry. ACGL outperforms 65.07% of its industry peers.
ACGL had an Average Return On Invested Capital over the past 3 years of 3.89%. This is in line with the industry average of 4.56%.
| 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
ACGL has a Profit Margin of 19.83%. This is amongst the best in the industry. ACGL outperforms 90.41% of its industry peers.
ACGL's Profit Margin has improved in the last couple of years.
With a decent Operating Margin value of 20.17%, ACGL is doing good in the industry, outperforming 76.71% of the companies in the same industry.
ACGL's Operating Margin has declined in the last couple of years.
| 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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so ACGL is destroying value.
The number of shares outstanding for ACGL has been increased compared to 1 year ago.
Compared to 5 years ago, ACGL has less shares outstanding
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.
ACGL has a better Debt to FCF ratio (0.45) than 80.82% of its industry peers.
A Debt/Equity ratio of 0.12 indicates that ACGL is not too dependend on debt financing.
With a decent Debt to Equity ratio value of 0.12, ACGL is doing good in the industry, outperforming 74.66% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.12 | ||
| Debt/FCF | 0.45 | ||
| Altman-Z | N/A |
ROIC/WACC0.45
WACC8.37%
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 by -3.68% 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.
The Revenue has grown by 27.51% in the past year. This is a very strong growth!
ACGL shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 19.89% yearly.
EPS 1Y (TTM)-3.68%
EPS 3Y37.06%
EPS 5Y26.96%
EPS Q2Q%39.2%
Revenue 1Y (TTM)27.51%
Revenue growth 3Y23.81%
Revenue growth 5Y19.89%
Sales Q2Q%-2.05%
3.2 Future
The Earnings Per Share is expected to grow by 2.98% on average over the next years.
ACGL is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.81% yearly.
EPS Next Y-1.36%
EPS Next 2Y1.03%
EPS Next 3Y2.98%
EPS Next 5YN/A
Revenue Next Year8.92%
Revenue Next 2Y6.36%
Revenue Next 3Y5.81%
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.
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
A Price/Earnings ratio of 9.79 indicates a reasonable valuation of ACGL.
Compared to the rest of the industry, the Price/Earnings ratio of ACGL indicates a somewhat cheap valuation: ACGL is cheaper than 60.27% of the companies listed in the same industry.
ACGL is valuated cheaply when we compare the Price/Earnings ratio to 26.06, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 9.47, the valuation of ACGL can be described as reasonable.
Based on the Price/Forward Earnings ratio, ACGL is valued a bit cheaper than 60.27% of the companies in the same industry.
ACGL is valuated cheaply when we compare the Price/Forward Earnings ratio to 32.73, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.79 | ||
| Fwd PE | 9.47 |
4.2 Price Multiples
ACGL's Enterprise Value to EBITDA is on the same level as the industry average.
Based on the Price/Free Cash Flow ratio, ACGL is valued a bit cheaper than 71.92% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 5.46 | ||
| EV/EBITDA | 8.7 |
4.3 Compensation for Growth
The decent profitability rating of ACGL may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.36
EPS Next 2Y1.03%
EPS Next 3Y2.98%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 5.58%, ACGL is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 3.38, ACGL pays a better dividend. On top of this ACGL pays more dividend than 88.36% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.37, ACGL pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.58% |
5.2 History
On average, the dividend of ACGL grows each year by 118.11%, which is quite nice.
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
51.79% of the earnings are spent on dividend by ACGL. This is a bit on the high side, but may be sustainable.
ACGL's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP51.79%
EPS Next 2Y1.03%
EPS Next 3Y2.98%
89.57
+1.81 (+2.06%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners94.19%
Inst Owner Change-0.12%
Ins Owners3.14%
Ins Owner Change-0.19%
Market Cap33.43B
Revenue(TTM)16.86B
Net Income(TTM)3.69B
Analysts75.2
Price Target110.58 (23.46%)
Short Float %1.63%
Short Ratio2.92
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.58% |
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)0.2%
PT rev (3m)-0.12%
EPS NQ rev (1m)33.04%
EPS NQ rev (3m)32.33%
EPS NY rev (1m)11.19%
EPS NY rev (3m)14.68%
Revenue NQ rev (1m)1.43%
Revenue NQ rev (3m)-0.29%
Revenue NY rev (1m)-0.67%
Revenue NY rev (3m)-0.11%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.79 | ||
| Fwd PE | 9.47 | ||
| P/S | 1.79 | ||
| P/FCF | 5.46 | ||
| P/OCF | 5.42 | ||
| P/B | 1.45 | ||
| P/tB | 1.54 | ||
| EV/EBITDA | 8.7 |
EPS(TTM)9.15
EY10.22%
EPS(NY)9.46
Fwd EY10.56%
FCF(TTM)16.42
FCFY18.33%
OCF(TTM)16.54
OCFY18.47%
SpS49.91
BVpS61.74
TBVpS58.2
PEG (NY)N/A
PEG (5Y)0.36
Graham Number112.74
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
WACC8.37%
ROIC/WACC0.45
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)-3.68%
EPS 3Y37.06%
EPS 5Y26.96%
EPS Q2Q%39.2%
EPS Next Y-1.36%
EPS Next 2Y1.03%
EPS Next 3Y2.98%
EPS Next 5YN/A
Revenue 1Y (TTM)27.51%
Revenue growth 3Y23.81%
Revenue growth 5Y19.89%
Sales Q2Q%-2.05%
Revenue Next Year8.92%
Revenue Next 2Y6.36%
Revenue Next 3Y5.81%
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 6 / 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 9.79 and the Price/Book (PB) ratio is 1.45.
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%.