The Navigators Group (NASDAQ: NAVG) and Argo Group International Holdings (NASDAQ:AGII) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, dividends, analyst recommendations, profitability, risk, institutional ownership and valuation.
Analyst Recommendations
This is a breakdown of current ratings and recommmendations for The Navigators Group and Argo Group International Holdings, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| The Navigators Group | 0 | 5 | 0 | 0 | 2.00 |
| Argo Group International Holdings | 1 | 1 | 0 | 0 | 1.50 |
The Navigators Group currently has a consensus target price of $56.75, indicating a potential upside of 2.53%. Argo Group International Holdings has a consensus target price of $70.00, indicating a potential upside of 17.15%. Given Argo Group International Holdings’ higher probable upside, analysts plainly believe Argo Group International Holdings is more favorable than The Navigators Group.
Dividends
The Navigators Group pays an annual dividend of $0.24 per share and has a dividend yield of 0.4%. Argo Group International Holdings pays an annual dividend of $1.08 per share and has a dividend yield of 1.8%. The Navigators Group pays out 8.5% of its earnings in the form of a dividend. Argo Group International Holdings pays out 19.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.
Insider & Institutional Ownership
73.0% of The Navigators Group shares are owned by institutional investors. Comparatively, 87.1% of Argo Group International Holdings shares are owned by institutional investors. 24.1% of The Navigators Group shares are owned by insiders. Comparatively, 4.9% of Argo Group International Holdings shares are owned by 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.
Risk and Volatility
The Navigators Group has a beta of 0.77, meaning that its stock price is 23% less volatile than the S&P 500. Comparatively, Argo Group International Holdings has a beta of 0.82, meaning that its stock price is 18% less volatile than the S&P 500.
Profitability
This table compares The Navigators Group and Argo Group International Holdings’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| The Navigators Group | 6.86% | 6.53% | 1.60% |
| Argo Group International Holdings | 10.04% | 6.39% | 1.52% |
Valuation & Earnings
This table compares The Navigators Group and Argo Group International Holdings’ revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| The Navigators Group | $1.24 billion | 1.32 | $135.66 million | $2.83 | 19.56 |
| Argo Group International Holdings | $1.69 billion | 1.07 | $244.20 million | $5.54 | 10.79 |
Argo Group International Holdings has higher revenue and earnings than The Navigators Group. Argo Group International Holdings is trading at a lower price-to-earnings ratio than The Navigators Group, indicating that it is currently the more affordable of the two stocks.
Summary
Argo Group International Holdings beats The Navigators Group on 8 of the 15 factors compared between the two stocks.
About The Navigators Group
The Navigators Group, Inc. is an insurance holding company. The Company is an international insurance company focused on marine insurance. The Company’s segments include U.S. Insurance, International Insurance (Int’l Insurance), Global Reinsurance (GlobalRe) and Corporate. The Company’s Property and Casualty (P&C) insurance business primarily offers general liability coverage, and umbrella and excess liability coverage to commercial enterprises through its U.S. Insurance and Int’l Insurance segments. It also offers reinsurance products through its GlobalRe segment. It distributes its products through international, national and regional, retail and wholesale insurance brokers. The Company’s U.S. Insurance and Int’l Insurance segments consists of three segments, such as Marine, Property and Casualty (P&C) and Professional Liability. Its GlobalRe products include accident & health (A&H), marine, P&C and professional liability.
About Argo Group International Holdings
Argo Group International Holdings, Ltd. is an underwriter of specialty insurance and reinsurance products in the property and casualty market. The Company operates through four segments: Excess and Surplus Lines, Commercial Specialty, International Specialty and Syndicate 1200. Excess and Surplus Lines segment carriers focus on risks that the standard (admitted) market is unwilling or unable to underwrite. The Excess and Surplus Lines segment consists of two operating platforms: Colony Specialty and Argo Pro. Commercial Specialty segment provides property, casualty and surety coverages designed to meet the insurance needs of businesses within certain markets. International Specialty segment underwrites insurance and reinsurance risks. It operate as Argo Re, the Casualty and Professional Lines unit of Argo Insurance in Bermuda, and Argo Seguros Brazil, S.A. in Brazil. The Syndicate 1200 segment underwrites around the world property, specialty and non-United States liability insurance.
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