Assured Guaranty Ltd. (NYSE: AGO) released its quarterly earnings on Thursday, revealing a significant increase in earnings per share (EPS) that exceeded analyst expectations. The company reported an EPS of $2.32 for the quarter, surpassing the consensus estimate of $1.54 by $0.78. Additionally, Assured Guaranty generated revenue of $277 million, well above analysts’ projections of $205.83 million.
This impressive performance marks a 77.6% increase in revenue compared to the same quarter last year, during which the company posted an EPS of $1.27. Assured Guaranty also demonstrated solid financial health, with a net margin of 40.65% and a return on equity of 7.09%.
Stock Performance and Dividend Increase
Following the earnings announcement, Assured Guaranty’s stock experienced a decline of $0.80, closing at $85.84 on Friday. The trading volume reached 173,062 shares, compared to an average volume of 266,839 shares. Over the past year, the stock has fluctuated, with a low of $74.09 and a high of $92.39. The company currently holds a market capitalization of $3.96 billion and has a price-to-earnings (P/E) ratio of 10.65.
In a positive move for shareholders, Assured Guaranty announced an increase in its quarterly dividend to $0.38 per share, up from the previous $0.34. This dividend will be paid on March 20, 2024, to stockholders of record as of March 6, 2024. The new dividend represents an annualized amount of $1.52 and a yield of 1.8%, with a payout ratio of 16.87%.
Institutional Investment Activity
The recent earnings announcement has prompted interest from institutional investors. Notable changes include Invesco Ltd., which increased its holdings in Assured Guaranty by 1.4% during the fourth quarter, now owning 194,128 shares valued at approximately $17.45 million. Corient Private Wealth LLC reported a remarkable 377.5% increase in its stake, acquiring an additional 73,339 shares for a total of 92,764 shares valued at around $8.34 million.
Other firms, such as Summit Global Investments and Empowered Funds LLC, also entered new positions during the same period. Currently, institutional investors hold 92.22% of Assured Guaranty’s stock.
Analyst Ratings and Market Outlook
Several financial analysts have adjusted their ratings following the earnings report. UBS Group raised its target price for Assured Guaranty from $92.00 to $94.00 while maintaining a “neutral” rating. Weiss Ratings reaffirmed a “buy” rating, and Keefe, Bruyette & Woods increased their price target from $105.00 to $108.00, categorizing the stock as “outperform.”
According to data from MarketBeat.com, two analysts have rated the stock as a “buy,” while two others have issued a “hold” rating. The average rating for Assured Guaranty is classified as a “Moderate Buy,” with an average target price set at $101.00.
Assured Guaranty Ltd. is based in Bermuda and specializes in providing financial guaranty insurance and reinsurance products, primarily serving public finance and infrastructure markets. The company’s primary focus is on credit enhancement, ensuring the timely payment of principal and interest on debt obligations issued by municipalities and infrastructure entities. This capability allows issuers to access capital at more attractive rates while offering protection to investors against credit events.
As Assured Guaranty continues to demonstrate robust financial performance, its strategic moves, including dividend increases and institutional investments, reflect a positive outlook in the financial services sector.
