Head-To-Head Analysis: Bowhead Specialty (NYSE:BOW) versus Arch Capital Group (NASDAQ:ACGL)

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

Insider & Institutional Ownership

89.1% of Arch Capital Group shares are owned by institutional investors. 4.2% of Arch Capital Group shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Bowhead Specialty	N/A	N/A	N/A
Arch Capital Group	33.86%	18.94%	5.62%

Analyst Recommendations

This is a summary of recent recommendations and price targets for Bowhead Specialty and Arch Capital Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bowhead Specialty	0	3	2	0	2.40
Arch Capital Group	0	5	11	0	2.69

Bowhead Specialty currently has a consensus target price of $31.40, indicating a potential downside of 13.16%. Arch Capital Group has a consensus target price of $118.38, indicating a potential upside of 17.51%. Given Arch Capital Group’s stronger consensus rating and higher probable upside, analysts clearly believe Arch Capital Group is more favorable than Bowhead Specialty.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bowhead Specialty	$389.11 million	3.04	N/A	N/A	N/A
Arch Capital Group	$16.21 billion	2.34	$4.44 billion	$14.90	6.76

Arch Capital Group has higher revenue and earnings than Bowhead Specialty.

Summary

Arch Capital Group beats Bowhead Specialty on 9 of the 10 factors compared between the two stocks.

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.

About Arch Capital Group

Arch Capital Group Ltd., together with its subsidiaries, provides insurance, reinsurance, and mortgage insurance products worldwide. The company's Insurance segment offers primary and excess casualty coverages; loss sensitive primary casualty insurance programs; directors' and officers' liability, errors and omissions liability, employment practices and fiduciary liability, crime, professional indemnity, and other financial related coverages; medical professional and general liability insurance coverages; and workers' compensation and umbrella liability, as well as commercial automobile and inland marine products. It also provides property, energy, marine, and aviation insurance; travel insurance; accident, disability, and medical plan insurance coverages; captive insurance programs; employer's liability; contract and commercial surety coverages; and collateral protection, debt cancellation, and service contract reimbursement products. This segment markets its products through a group of licensed independent retail and wholesale brokers. Its Reinsurance segment provides casualty reinsurance for third party liability exposures; marine and aviation; motor reinsurance, whole account multi-line treaties, cyber, trade credit, surety, accident and health, workers' compensation catastrophe, agriculture, trade credit, and political risk products; reinsurance protection for catastrophic losses, and personal lines and commercial property exposures; life reinsurance; casualty clash; and risk management solutions. This segment markets its reinsurance products through brokers. The company's Mortgage segment offers direct mortgage insurance and mortgage reinsurance. The company was founded in 1995 and is based in Pembroke, Bermuda.