XL Group (XL) and Allied World Assurance Company Holdings (AWH) Head to Head Analysis

XL Group (NYSE: XL) and Allied World Assurance Company Holdings (NYSE:AWH) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, dividends, institutional ownership, earnings, valuation, profitability and analyst recommendations.

Institutional & Insider Ownership

95.3% of XL Group shares are held by institutional investors. Comparatively, 86.5% of Allied World Assurance Company Holdings shares are held by institutional investors. 3.0% of XL Group shares are held by company insiders. Comparatively, 3.2% of Allied World Assurance Company Holdings shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares XL Group and Allied World Assurance Company Holdings’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
XL Group $11.02 billion 0.92 $1.47 billion $3.08 12.78
Allied World Assurance Company Holdings N/A N/A N/A $2.90 16.98

XL Group has higher revenue and earnings than Allied World Assurance Company Holdings. XL Group is trading at a lower price-to-earnings ratio than Allied World Assurance Company Holdings, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent recommendations and price targets for XL Group and Allied World Assurance Company Holdings, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
XL Group 0 6 4 0 2.40
Allied World Assurance Company Holdings 0 6 0 0 2.00

XL Group currently has a consensus target price of $46.00, indicating a potential upside of 16.84%. Allied World Assurance Company Holdings has a consensus target price of $39.25, indicating a potential downside of 20.29%. Given XL Group’s stronger consensus rating and higher probable upside, equities research analysts clearly believe XL Group is more favorable than Allied World Assurance Company Holdings.

Profitability

This table compares XL Group and Allied World Assurance Company Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
XL Group 7.53% 4.88% 1.06%
Allied World Assurance Company Holdings 12.56% 8.96% 2.42%

Dividends

XL Group pays an annual dividend of $0.88 per share and has a dividend yield of 2.2%. Allied World Assurance Company Holdings pays an annual dividend of $0.52 per share and has a dividend yield of 1.1%. XL Group pays out 28.6% of its earnings in the form of a dividend. Allied World Assurance Company Holdings pays out 17.9% 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. XL Group has raised its dividend for 3 consecutive years and Allied World Assurance Company Holdings has raised its dividend for 4 consecutive years.

Risk & Volatility

XL Group has a beta of 1.01, meaning that its share price is 1% more volatile than the S&P 500. Comparatively, Allied World Assurance Company Holdings has a beta of 0.69, meaning that its share price is 31% less volatile than the S&P 500.

Summary

XL Group beats Allied World Assurance Company Holdings on 8 of the 14 factors compared between the two stocks.

XL Group Company Profile

XL Group plc is an insurance and reinsurance company providing property, casualty and specialty products to industrial, commercial and professional firms, insurance companies and other enterprises. The Company operates through two segments: Insurance and Reinsurance. The Company’s Insurance segment is organized into four product divisions: Global Casualty (Casualty); Global Energy Property, & Construction (EPC); Global Professional (Professional), and Global Specialty (Specialty). Its insurance operations provide insurance policies for corporate risks that may require large limits, use of a captive insurance company and the need for a program of locally issued policies. The Reinsurance segment provides casualty, property risk, property catastrophe, specialty, and other reinsurance lines on a global basis with business being written on both a proportional and non-proportional treaty basis, and also on a facultative basis.

Allied World Assurance Company Holdings Company Profile

Allied World Assurance Company Holdings Ltd is a Germany-based holding company. It provides property, casualty and specialty insurance and reinsurance solutions to clients around the world. The Company operates in three segments: North American Insurance, Global Markets Insurance and Reinsurance. The North American Insurance segment consists of the Company’s direct insurance operations in the United States, Bermuda and Canada. The Global Markets Insurance segment includes all of the Company’s direct insurance operations outside of North America. The Company’s reinsurance segment includes the reinsurance of property, general casualty, professional liability, specialty lines and property catastrophe coverage’s written by other reinsurance companies. The Company leases space in Australia, Bermuda, Canada, Hong Kong, Ireland, Labuan, Singapore, the United Kingdom and the United States for the operation of its North American Insurance, Global Markets Insurance and Reinsurance segments.

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