Hippo (NYSE:HIPO) vs. Arch Capital Group (NASDAQ:ACGL) Financial Contrast

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

Analyst Ratings

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

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

Hippo currently has a consensus target price of $19.00, indicating a potential upside of 10.66%. Arch Capital Group has a consensus target price of $113.73, indicating a potential upside of 0.29%. Given Hippo’s higher probable upside, equities research analysts clearly believe Hippo is more favorable than Arch Capital Group.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hippo	$209.70 million	2.04	-$273.10 million	($10.08)	-1.70
Arch Capital Group	$13.63 billion	3.13	$4.44 billion	$12.67	8.95

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.

Risk & Volatility

Hippo has a beta of 1.35, meaning that its stock price is 35% more volatile than the S&P 500. Comparatively, Arch Capital Group has a beta of 0.6, meaning that its stock price is 40% less volatile than the S&P 500.

Insider and Institutional Ownership

43.0% of Hippo shares are held by institutional investors. Comparatively, 89.1% of Arch Capital Group shares are held by institutional investors. 11.4% of Hippo shares are held by insiders. Comparatively, 4.2% of Arch Capital Group shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

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

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

Summary

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

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.

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.