Fidelity National Financial (NYSE: FNF) and Argo Group International (NASDAQ:AGII) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitability, risk, earnings, dividends, valuation, analyst recommendations and institutional ownership.

Earnings & Valuation

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This table compares Fidelity National Financial and Argo Group International’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Fidelity National Financial $7.26 billion 1.46 $771.00 million $2.27 17.00
Argo Group International $1.77 billion 1.10 $50.30 million ($0.42) -138.21

Fidelity National Financial has higher revenue and earnings than Argo Group International. Argo Group International is trading at a lower price-to-earnings ratio than Fidelity National Financial, indicating that it is currently the more affordable of the two stocks.

Dividends

Fidelity National Financial pays an annual dividend of $1.20 per share and has a dividend yield of 3.1%. Argo Group International pays an annual dividend of $1.08 per share and has a dividend yield of 1.9%. Fidelity National Financial pays out 52.9% of its earnings in the form of a dividend. Argo Group International pays out -257.1% 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. Fidelity National Financial has raised its dividend for 6 consecutive years. Fidelity National Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

83.0% of Fidelity National Financial shares are held by institutional investors. Comparatively, 79.6% of Argo Group International shares are held by institutional investors. 5.0% of Fidelity National Financial shares are held by insiders. Comparatively, 5.2% of Argo Group International shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Fidelity National Financial and Argo Group International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Fidelity National Financial 8.13% 11.71% 5.76%
Argo Group International 2.84% -0.80% -0.17%

Analyst Ratings

This is a summary of recent recommendations and price targets for Fidelity National Financial and Argo Group International, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Fidelity National Financial 0 1 5 0 2.83
Argo Group International 0 0 1 0 3.00

Fidelity National Financial presently has a consensus target price of $44.00, suggesting a potential upside of 13.99%. Argo Group International has a consensus target price of $62.00, suggesting a potential upside of 6.80%. Given Fidelity National Financial’s higher possible upside, research analysts clearly believe Fidelity National Financial is more favorable than Argo Group International.

Risk & Volatility

Fidelity National Financial has a beta of 0.83, meaning that its share price is 17% less volatile than the S&P 500. Comparatively, Argo Group International has a beta of 0.61, meaning that its share price is 39% less volatile than the S&P 500.

Summary

Fidelity National Financial beats Argo Group International on 14 of the 17 factors compared between the two stocks.

About Fidelity National Financial

Fidelity National Financial, Inc., together with its subsidiaries, provides title insurance, technology, and transaction services to the real estate and mortgage industries in the United States. The company operates in Title, and Corporate and Other segments. It offers title insurance, escrow, and other title related services, including collection and trust activities, trustee sales guarantees, recordings and conveyances, and home warranty insurance. The company also offers other title related services used in the production and management of mortgage loans. In addition, it engages in real estate brokerage business. Fidelity National Financial, Inc. was founded in 1847 and is headquartered in Jacksonville, Florida.

About Argo Group International

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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