Ambac Financial Group (NASDAQ: AMBC) and Fidelity National Financial (NYSE:FNF) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their risk, analyst recommendations, earnings, dividends, profitability, institutional ownership and valuation.
Earnings & Valuation
This table compares Ambac Financial Group and Fidelity National Financial’s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| Ambac Financial Group | $578.75 million | 1.49 | $115.78 million | ($2.48) | -7.69 |
| Fidelity National Financial | $9.89 billion | 1.30 | $1.58 billion | $2.29 | 20.55 |
Fidelity National Financial has higher revenue and earnings than Ambac Financial Group. Ambac Financial Group is trading at a lower price-to-earnings ratio than Fidelity National Financial, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Ambac Financial Group and Fidelity National Financial’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Ambac Financial Group | -16.39% | 5.74% | 0.50% |
| Fidelity National Financial | 7.49% | 10.41% | 5.00% |
Dividends
Fidelity National Financial pays an annual dividend of $1.00 per share and has a dividend yield of 2.1%. Ambac Financial Group does not pay a dividend. Fidelity National Financial pays out 43.7% of its earnings in the form of a dividend. Ambac Financial Group has raised its dividend for 5 consecutive years.
Risk & Volatility
Ambac Financial Group has a beta of 1.96, suggesting that its share price is 96% more volatile than the S&P 500. Comparatively, Fidelity National Financial has a beta of 0.95, suggesting that its share price is 5% less volatile than the S&P 500.
Institutional and Insider Ownership
72.0% of Ambac Financial Group shares are owned by institutional investors. Comparatively, 86.9% of Fidelity National Financial shares are owned by institutional investors. 0.6% of Ambac Financial Group shares are owned by company insiders. Comparatively, 5.0% of Fidelity National Financial shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Analyst Ratings
This is a summary of recent recommendations and price targets for Ambac Financial Group and Fidelity National Financial, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Ambac Financial Group | 0 | 1 | 1 | 0 | 2.50 |
| Fidelity National Financial | 0 | 1 | 3 | 0 | 2.75 |
Ambac Financial Group currently has a consensus price target of $23.50, indicating a potential upside of 23.17%. Fidelity National Financial has a consensus price target of $45.00, indicating a potential downside of 4.38%. Given Ambac Financial Group’s higher possible upside, analysts plainly believe Ambac Financial Group is more favorable than Fidelity National Financial.
Summary
Fidelity National Financial beats Ambac Financial Group on 11 of the 16 factors compared between the two stocks.
Fidelity National Financial Company Profile
Fidelity National Financial, Inc. (FNF) is a holding company. FNF, through its subsidiaries, provides title insurance, mortgage services and diversified services. FNF operates in four segments: Fidelity National Title Group, Remy, Restaurant Group and Corporate and Other. The Fidelity National Title Group segment consists of the operations of FNF’s title insurance underwriters and related businesses. The Remy segment is a designer, manufacturer, remanufacturer, marketer and distributor of aftermarket and original equipment electrical components for automobiles, light trucks, heavy-duty trucks and other vehicles. The Restaurant Group segment consists of the operations of ABRH. The corporate and other segment consists of the operations of the holding company. In January 2014, FNF announced the closing of its acquisition of Lender Processing Services, Inc. (LPS). On January 2, 2014, FNF formed a wholly owned subsidiary Black Knight Financial Services, Inc.
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