Critical Comparison: Assured Guaranty (NYSE:AGO) & The PMI Group (OTCMKTS:PPMIQ)

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

Earnings & Valuation

This table compares The PMI Group and Assured Guaranty”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
The PMI Group	N/A	N/A	N/A	N/A	N/A
Assured Guaranty	$921.00 million	4.99	$739.00 million	$12.87	7.01

Assured Guaranty has higher revenue and earnings than The PMI Group.

Insider & Institutional Ownership

92.2% of Assured Guaranty shares are held by institutional investors. 5.1% of Assured Guaranty shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
The PMI Group	N/A	N/A	N/A
Assured Guaranty	70.37%	11.58%	5.39%

Analyst Recommendations

This is a breakdown of current ratings and target prices for The PMI Group and Assured Guaranty, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
The PMI Group	0	0	0	0	0.00
Assured Guaranty	0	1	2	0	2.67

Assured Guaranty has a consensus target price of $103.33, suggesting a potential upside of 14.47%. Given Assured Guaranty’s stronger consensus rating and higher probable upside, analysts plainly believe Assured Guaranty is more favorable than The PMI Group.

Summary

Assured Guaranty beats The PMI Group on 9 of the 9 factors compared between the two stocks.

About The PMI Group

The PMI Group, Inc. (TPG) through its subsidiary PMI Mortgage Insurance Co. (MIC), and its affiliated companies (collectively PMI), provides residential mortgage insurance in the United States. During the year ended December 31, 2009, the Company operated in three business segments: United States Mortgage Insurance Operations, International Operations and Corporate and Other. As a United States residential mortgage insurer, PMI offers a variety of mortgage insurance products to meet the capital and credit risk mitigation needs of its customers. In November 2011, the Company announced that it has filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware.

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.