Financial Comparison: Allianz (OTCMKTS:ALIZY) versus Assured Guaranty (NYSE:AGO)

Allianz (OTCMKTS:ALIZY) and Assured Guaranty (NYSE:AGO) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, institutional ownership, risk, earnings, profitability, valuation and analyst recommendations.

Dividends

Allianz pays an annual dividend of $1.40 per share and has a dividend yield of 2.7%. Assured Guaranty pays an annual dividend of $1.52 per share and has a dividend yield of 2.1%. Allianz pays out 39.4% of its earnings in the form of a dividend. Assured Guaranty pays out 20.3% 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. Assured Guaranty has raised its dividend for 7 consecutive years.

Volatility & Risk

Allianz has a beta of 0.65, suggesting that its stock price is 35% less volatile than the S&P 500. Comparatively, Assured Guaranty has a beta of 0.73, suggesting that its stock price is 27% less volatile than the S&P 500.

Institutional & Insider Ownership

0.0% of Allianz shares are owned by institutional investors. Comparatively, 92.2% of Assured Guaranty shares are owned by institutional investors. 5.7% of Assured Guaranty shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Allianz and Assured Guaranty, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Allianz	0	2	2	1	2.80
Assured Guaranty	0	3	2	0	2.40

Assured Guaranty has a consensus price target of $90.33, indicating a potential upside of 23.78%. Given Assured Guaranty’s higher possible upside, analysts clearly believe Assured Guaranty is more favorable than Allianz.

Earnings and Valuation

This table compares Allianz and Assured Guaranty”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Allianz	$211.45 billion	0.92	$12.19 billion	$3.55	14.43
Assured Guaranty	$1.11 billion	2.89	$503.00 million	$7.50	9.73

Allianz has higher revenue and earnings than Assured Guaranty. Assured Guaranty is trading at a lower price-to-earnings ratio than Allianz, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Allianz and Assured Guaranty’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Allianz	6.31%	18.33%	1.16%
Assured Guaranty	37.34%	7.11%	3.25%

Summary

Assured Guaranty beats Allianz on 10 of the 17 factors compared between the two stocks.

About Allianz

Allianz SE, together with its subsidiaries, provides property-casualty insurance, life/health insurance, and asset management products and services worldwide. The company’s Property-Casualty segment offers various insurance products, including motor liability and own damage, accident, general liability, fire and property, legal expense, credit, and travel to private and corporate customers. Its Life/Health segment provides a range of life and health insurance products on an individual and a group basis, such as annuities, endowment and term insurance, and unit-linked and investment-oriented products, as well as private and supplemental health, and long-term care insurance products. The company’s Asset Management segment offers institutional and retail asset management products and services to third-party investors comprising equity and fixed income funds, and multi-assets; and alternative investment products that include real estate, infrastructure debt/equity, real assets, liquid alternatives, and solutions. Its Corporate and Other segment provides banking services for retail clients, as well as digital investment services. Allianz SE was founded in 1890 and is headquartered in Munich, Germany.

About Assured Guaranty

Assured Guaranty Ltd., together with its subsidiaries, provides credit protection products to public finance, infrastructure, and structured finance markets in the United States and internationally. It operates through two segments: Insurance and Asset Management. The company offers financial guaranty insurance that protects holders of debt instruments and other monetary obligations from defaults in scheduled payments. It insures and reinsures various debt obligations, including bonds issued by the United States state governmental authorities; and notes issued to finance infrastructure projects. In addition, the company insures and reinsures various the U.S. public finance obligations, such as general obligation, tax-backed, municipal utility, transportation, healthcare, higher education, infrastructure, housing revenue, investor-owned utility, renewable energy, and other public finance bonds. Further, the company involved in insuring and reinsuring of non-U.S. public finance obligations comprising regulated utilities, infrastructure finance, sovereign and sub-sovereign, renewable energy bonds, pooled infrastructure, and other public finance obligations; and the U.S. and non-U.S. Structured finance obligations, including residential mortgage-backed securities, life insurance transactions, consumer receivables securities, subscription finance facilities, pooled corporate obligations, and financial products. Additionally, it offers specialty business, such as real estate properties, insurance securitizations, and aircraft residual value insurance (RVI) transactions; and asset management services comprising investment advisory services. It markets its financial guaranty insurance directly to issuers and underwriters of public finance and structured finance securities, as well as to investors in such obligations. Assured Guaranty Ltd. was incorporated in 2003 and is headquartered in Hamilton, Bermuda.