Investment Thesis
Assured Guaranty demonstrates robust operational profitability with a 59.6% operating margin and exceptional cash generation (23.3% FCF margin), indicating a fundamentally healthy insurance business with strong underwriting discipline. The company maintains conservative leverage (0.30x debt/equity) and excellent interest coverage (28.8x), providing financial flexibility. However, modest ROE of 8.9% and slowing net income growth (+0.8% YoY) suggest capital deployment efficiency challenges that warrant monitoring.
AGO Strengths
- Exceptional operating margin of 59.6% demonstrates pricing power and cost discipline in surety insurance business
- Strong free cash flow generation of $259M with 23.3% FCF margin provides sustainable capital returns
- Conservative balance sheet with 0.30x debt/equity ratio and 28.8x interest coverage ensures financial stability
- High net profit margin of 45.3% indicates strong core profitability despite reinsurance and claims costs
- Significant insider activity with 22 Form 4 filings in last 90 days suggests management confidence
AGO Risks
- Weak net income growth of only 0.8% YoY despite strong operating performance signals potential claims headwinds or margin compression
- Low ROE of 8.9% and ROA of 4.1% indicate suboptimal returns on capital relative to equity base
- Surety insurance exposure creates concentration risk in construction and infrastructure bond markets vulnerable to economic cycles
- Limited revenue growth visibility with disclosed 1.1B baseline and uncertain YoY trajectory
- Cash position of $388M represents only 3.2% of total assets, potentially constraining growth or shareholder distributions
Key Metrics to Watch
- Net income growth trajectory and margin trend in subsequent quarters to confirm stabilization
- Return on equity progression toward 10%+ threshold to validate capital efficiency improvements
- Free cash flow conversion consistency and sustainable payout capacity for capital returns
- Claims ratio and loss reserve adequacy in surety portfolio under varying economic conditions
- Underwriting profitability and premium volumes by business segment to assess growth quality
AGO Financial Metrics
AGO Profitability Ratios
AGO Balance Sheet & Liquidity
AGO 5-Year Financial Trend
5-Year Trend Summary: ASSURED GUARANTY LTD's revenue has declined by 40% over the 5-year period, indicating business contraction. The most recent EPS of $12.30 reflects profitable operations.
AGO Growth Metrics (YoY)
AGO Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2024 | N/A | $157.0M | $2.60 |
| Q2 2024 | N/A | $78.0M | $1.41 |
| Q1 2024 | N/A | $81.0M | $1.34 |
| Q3 2023 | N/A | $11.0M | $0.18 |
| Q2 2023 | $21.0M | $19.0M | $0.29 |
| Q1 2023 | $26.0M | $66.0M | $0.98 |
| Q3 2022 | $16.0M | $11.0M | $0.18 |
| Q2 2022 | $21.0M | $19.0M | $0.29 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
AGO Capital Allocation
AGO SEC Filings
Access official SEC EDGAR filings for ASSURED GUARANTY LTD (CIK: 0001273813)