Arch Capital Group (NASDAQ:ACGLO) vs. Goosehead Insurance (NASDAQ:GSHD) Financial Contrast

Goosehead Insurance (NASDAQ:GSHD) and Arch Capital Group (NASDAQ:ACGLO) are both financial services companies, but which is the superior investment? We will contrast the two businesses based on the strength of their dividends, risk, earnings, institutional ownership, profitability, valuation and analyst recommendations.

Dividends

Goosehead Insurance pays an annual dividend of $4.60 per share and has a dividend yield of 4.3%. Arch Capital Group pays an annual dividend of $1.36 per share and has a dividend yield of 5.8%. Goosehead Insurance pays out 741.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Goosehead Insurance and Arch Capital Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Goosehead Insurance	1	4	5	0	2.40
Arch Capital Group	0	0	0	0	N/A

Goosehead Insurance currently has a consensus price target of $89.40, indicating a potential downside of 17.32%. Given Goosehead Insurance’s higher probable upside, research analysts clearly believe Goosehead Insurance is more favorable than Arch Capital Group.

Valuation and Earnings

This table compares Goosehead Insurance and Arch Capital Group”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Goosehead Insurance	$276.59 million	14.85	$14.14 million	$0.62	174.40
Arch Capital Group	$15.02 billion	N/A	N/A	N/A	N/A

Goosehead Insurance has higher earnings, but lower revenue than Arch Capital Group.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Goosehead Insurance	6.71%	244.15%	5.41%
Arch Capital Group	N/A	N/A	N/A

Summary

Goosehead Insurance beats Arch Capital Group on 5 of the 8 factors compared between the two stocks.

About Goosehead Insurance

Goosehead Insurance, Inc. operates as a holding company for Goosehead Financial, LLC that engages in the provision of personal lines insurance agency services in the United States. The company offers homeowner’s, automotive, dwelling property, flood, wind, earthquake, excess liability or umbrella, motorcycle, recreational vehicle, general liability, property, and life insurance products and services. As of December 31, 2023, it operated 1,415 franchise locations. The company was founded in 2003 and is headquartered in Westlake, Texas.

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.