Assured Guaranty Ltd. (AGO) vs First American Financial Corporation (FAF)

Assured Guaranty Ltd. and First American Financial Corporation are both Insurance Specialty companies. First American Financial Corporation is the larger, with a market value of $6.7B against $3.0B — 2.2× the size. First American Financial Corporation trades at the lower P/E: 9.2× against 9.3×. First American Financial Corporation grew revenue faster over the last twelve months: 22.6% against −10.6%. Assured Guaranty Ltd. has the higher net margin (37.3% vs 9.33%) and the lower return on invested capital (3.91% vs 17.0%). Both pay a dividend; First American Financial Corporation yields more (3.59% vs 1.36%). Across the 23 metrics below, First American Financial Corporation leads on 18 and Assured Guaranty Ltd. on 5.

Valuation

Metric AGO FAF Insurance Specialty median
P/E 9.27 9.15 9.15
P/S 3.27 0.85 1.84
P/B 0.55 1.20 1.16
Price to free cash flow 9.50 8.16 8.16
EV/EBITDA 10.26 4.07 7.51
EV/Sales 4.76 0.72 2.17
Earnings yield 10.79% 10.93% 10.79%
Free cash flow yield 10.52% 12.25% 11.79%

Profitability

Metric AGO FAF Insurance Specialty median
Gross margin 99.04% 100.00% 73.81%
Operating margin 46.38% 15.52% 17.70%
Net margin 37.34% 9.33% 13.80%
Free cash flow margin 34.47% 10.44% 34.47%
Return on equity 6.21% 13.81% 12.01%
Return on assets 2.84% 4.23% 4.12%
Return on invested capital 3.91% 16.97% 8.77%

Growth

Metric AGO FAF Insurance Specialty median
Revenue growth (TTM) (10.56%) 22.55% 7.53%
EPS growth (last fiscal year) 49.34% 376.19% —
Revenue growth, 5-year CAGR (0.09%) 1.01% 2.24%
Net income growth, 5-year CAGR 6.80% (2.23%) 0.00%

Health

Metric AGO FAF Insurance Specialty median
Debt to equity 0.31 0.27 0.15
Current ratio 0.42 1.18 0.53
Net debt to EBITDA 2.24 0.13 0.28

Dividend

Metric AGO FAF Insurance Specialty median
Dividend yield 1.36% 3.59% 2.60%
Payout ratio 0.21 0.90 0.21

Size

Metric AGO FAF Insurance Specialty median
Market cap 3.01b 6.70b 3.13b

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