Arch Capital Group Ltd. Depositary Shares Each Representing 1/1000th Interest in a Share of 5.45% Non-Cumulative Preferred Shares Series F (ACGLO)

FairStock Score: 90/100 — HIGH CONVICTION

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

As a value investor, I look at ACGLO not as a common equity but as a preferred claim on Arch Capital. The underlying insurer is high quality: in fiscal year 2025, the year ended 2025-12-31, it reported revenue of $19.9B and net income of $4.4B, with diluted EPS of $11.60. That compares with fiscal year 2024, the year ended 2024-12-31, when revenue was $17.4B, net income was $4.3B, and diluted EPS was $11.19. So revenue grew, but earnings were roughly flat. Return on equity is strong at 19.94% on a FairStock-calculated basis, and debt-to-equity is only 0.18, suggesting a solid balance sheet. The business has underwriting and investment operations across insurance, reinsurance, and mortgage, which can be cyclical but also profitable when priced well. The preferred shares pay a 5.45% non-cumulative dividend. At the 2026-10-13 close of $18.40, the yield is 7.43%, well above the coupon, because the price is below the $25 liquidation preference. That discount can offer capital appreciation if the company remains healthy and rates cooperate. However, non-cumulative preferreds are not risk-free: if the board skips a dividend, it does not accrue. The FairStock-calculated P/E of 3.92 and P/B of 0.27 look extremely cheap, but they likely reflect the common equity's earnings and book value, not the preferred's claim. The Piotroski F-Score of 4/9 is middling. I would want combined ratio, CET1, and preferred coverage data, which are not given. Overall, the issuer looks strong, but the security is a hybrid with capped upside and real credit risk.

In plain English: Arch Capital provides insurance and reinsurance around the world. The company is profitable and carries little debt, which helps support the fixed dividend on these preferred shares. At $18.40, the shares offer a high current income, but the dividend is not guaranteed and the price can fall if the company's results weaken.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q2 2026 10-Q (period ended 2026-06-30) · fiscal Q1 2026 10-Q (period ended 2026-03-31) · fiscal Q3 2025 10-Q (period ended 2025-09-30) · fiscal Q2 2025 10-Q (period ended 2025-06-30) · FY2025 10-K (period ended 2025-12-31) · FY2024 10-K (period ended 2024-12-31) · FY2023 10-K (period ended 2023-12-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer