Analyzing Octave Specialty Group (NYSE:OSG) & Sompo (OTCMKTS:SMPNY)

Octave Specialty Group (NYSE:OSG) and Sompo (OTCMKTS:SMPNY) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, profitability, risk, earnings, valuation and institutional ownership.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Octave Specialty Group and Sompo, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Octave Specialty Group	2	1	2	0	2.00
Sompo	0	1	0	0	2.00

Octave Specialty Group presently has a consensus price target of $11.50, indicating a potential upside of 150.82%. Given Octave Specialty Group’s higher probable upside, research analysts plainly believe Octave Specialty Group is more favorable than Sompo.

Profitability

This table compares Octave Specialty Group and Sompo’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Octave Specialty Group	-51.10%	0.44%	0.17%
Sompo	12.35%	13.62%	3.96%

Insider and Institutional Ownership

80.9% of Octave Specialty Group shares are owned by institutional investors. 7.2% of Octave Specialty Group shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Octave Specialty Group and Sompo”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Octave Specialty Group	$251.22 million	0.82	-$261.69 million	($3.65)	-1.26
Sompo	$35.69 billion	1.11	$4.22 billion	$2.54	8.37

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

Volatility & Risk

Octave Specialty Group has a beta of 0.87, suggesting that its stock price is 13% less volatile than the S&P 500. Comparatively, Sompo has a beta of 0.29, suggesting that its stock price is 71% less volatile than the S&P 500.

Summary

Sompo beats Octave Specialty Group on 7 of the 13 factors compared between the two stocks.

About Octave Specialty Group

Ambac Financial Group, Inc. operates as a financial services holding company. It operates three businesses: Specialty Property and Casualty Insurance, Insurance Distribution, and Legacy Financial Guarantee (LFG) Insurance. The Specialty Property and Casualty Insurance business provides specialty property and casualty program insurance with a focus commercial and personal liability risks. The Insurance Distribution business includes the specialty property and casualty insurance distribution business, which includes managing general agents and underwriters, insurance wholesalers, brokers, and other distribution businesses. The LFG Insurance business offers financial guarantee insurance policies that provide an unconditional and irrevocable guarantee, which protects the holder of a debt obligation against non-payment when due of the principal and interest on the obligations guaranteed. Ambac Financial Group, Inc. was incorporated in 1991 and is headquartered in New York, New York.

About Sompo

Sompo Holdings, Inc. provides property and casualty (P&C) insurance services in Japan and internationally. The company operates through Domestic P&C Insurance Business, Overseas Insurance Business, Domestic Life Insurance Business, and Nursing Care & Seniors Business segments. It offers various P&C insurance products, including automobile, fire, personal accident, and marine, as well as security, risk management, assistance, and warranty services; and life insurance products. The company also provides nursing care and seniors services; and customer security, health, and wellbeing support services. In addition, it offers asset management services; home remodeling services; and health support services comprising health guidance and employee assistance programs. The company was formerly known as Sompo Japan Nipponkoa Holdings, Inc. and changed its name to Sompo Holdings, Inc. in October 2016. The company was incorporated in 2010 and is headquartered in Tokyo, Japan.