Financial Comparison: Axis Capital (NYSE:AXS) versus Bowhead Specialty (NYSE:BOW)

Axis Capital (NYSE:AXS) and Bowhead Specialty (NYSE:BOW) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, risk, earnings and valuation.

Profitability

This table compares Axis Capital and Bowhead Specialty’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Axis Capital	16.08%	19.25%	3.18%
Bowhead Specialty	10.12%	13.89%	3.03%

Institutional & Insider Ownership

93.4% of Axis Capital shares are owned by institutional investors. 0.7% of Axis Capital shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Axis Capital and Bowhead Specialty”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Axis Capital	$6.29 billion	1.20	$1.08 billion	$12.10	8.07
Bowhead Specialty	$425.66 million	1.97	$38.24 million	$1.47	17.41

Axis Capital has higher revenue and earnings than Bowhead Specialty. Axis Capital is trading at a lower price-to-earnings ratio than Bowhead Specialty, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Axis Capital has a beta of 0.73, suggesting that its stock price is 27% less volatile than the S&P 500. Comparatively, Bowhead Specialty has a beta of -0.93, suggesting that its stock price is 193% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Axis Capital and Bowhead Specialty, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Axis Capital	0	3	7	0	2.70
Bowhead Specialty	0	4	4	0	2.50

Axis Capital currently has a consensus target price of $115.00, indicating a potential upside of 17.82%. Bowhead Specialty has a consensus target price of $35.80, indicating a potential upside of 39.90%. Given Bowhead Specialty’s higher possible upside, analysts plainly believe Bowhead Specialty is more favorable than Axis Capital.

Summary

Axis Capital beats Bowhead Specialty on 11 of the 14 factors compared between the two stocks.

About Axis Capital

AXIS Capital Holdings Limited, through its subsidiaries, provides various specialty insurance and reinsurance products in Bermuda, the United States, and internationally. It operates through two segments, Insurance and Reinsurance. The Insurance segment offers professional insurance products that cover directors' and officers' liability, errors and omissions, employment practices, fiduciary, crime, professional indemnity, medical malpractice, and other financial insurance related coverages for commercial enterprises, financial institutions, not-for-profit organizations, and other professional service providers; and property insurance products for commercial buildings, residential premises, construction projects, property in transit, onshore renewable energy installations, and physical damage and business interruption following an act of terrorism. This segment also provides marine and aviation insurance services for offshore energy, renewable offshore energy, cargo, liability, including kidnap and ransom, fine art, specie, and hull war, hull and liability, and specific war coverage for passenger airlines, cargo operations, general aviation operations, airports, aviation authorities, security firms, and product manufacturers; personal accident, travel insurance, specialty health products for employer and affinity groups, and pet insurance products; and liability, cyber, and credit and political risk insurance services. The Reinsurance segment offers agriculture, marine and aviation, catastrophe, accidental and health, credit and surety, motor, professional, travel, life, engineering, property, and liability reinsurance products. AXIS Capital Holdings Limited was founded in 2001 and is headquartered in Pembroke, Bermuda.

About Bowhead Specialty

Bowhead Specialty Holdings Inc. provides specialty property and casualty insurance products in the United States. It underwrites casualty insurance solutions for risks in the construction, distribution, heavy manufacturing, real estate, and hospitality segments; professional liability insurance solutions for financial institutions, private and public directors and officers liability insurance, errors and omissions liability insurance, and cyber segments; and healthcare solutions for hospitals, senior care providers, managed care organizations, miscellaneous medical facilities, and healthcare management liability segments. The company distributes its products through distribution partners in wholesale and retail markets. Bowhead Specialty Holdings Inc. was formerly known as Bowhead Holdings Inc. and changed its name to Bowhead Specialty Holdings Inc. in March 2024. The company was founded in 2020 and is based in New York, New York. Bowhead Specialty Holdings Inc. operates as a subsidiary of Bowhead Insurance Holdings LP.