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1. Company Snapshot

1.a. Company Description

Assured Guaranty Ltd., through its subsidiaries, provides credit protection products to public finance, infrastructure, and structured finance markets in the United States and internationally.The company operates in two segments, Insurance and Asset Management.It offers financial guaranty insurance that protects holders of debt instruments and other monetary obligations from defaults in scheduled payments.


The company insures and reinsures various debt obligations, including bonds issued by the United States state governmental authorities; and notes issued to finance infrastructure projects.It also 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, it is 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, pooled corporate obligations, financial products, and other structured finance securities.


Additionally, the company offers specialty insurance and reinsurance that include life and aircraft residual value insurance transactions; and asset management services comprising investment advisory services, including management of collateralized loan obligations, and opportunity and liquid strategy funds.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.

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1.b. Last Insights on AGO

Assured Guaranty Ltd.'s recent performance was negatively impacted by a Q4 earnings miss, with a quarterly earnings of $1.27 per share, missing the consensus estimate of $1.48 per share. This decline in earnings, compared to $5.75 per share a year ago, suggests that the company's financial performance is weakening. The lack of growth in earnings, despite a 10% increase in quarterly dividend to $0.34 per common share, may be a concern for investors.

1.c. Company Highlights

2. Assured Guaranty Ltd. Delivers Strong 2025 Results

Assured Guaranty Ltd. reported a significant increase in adjusted operating income per share to $9.80 in 2025, up from $7.10 in 2024. The company's adjusted operating income was $109 million, or $2.32 per share, in the fourth quarter, representing an 83% increase on a per-share basis from 2024. The actual EPS of $2.32 beat estimates of $1.54. The present value of new business production (PVP) totaled $286 million, with contributions from each of its three financial guarantee underwriting groups. The company's alternative investments generated $47 million in pretax adjusted operating income in the fourth quarter and $160 million for the full year.

Publication Date: Mar -01

📋 Highlights
  • Adjusted Operating Income Per Share Growth:: Rose to $9.80 in 2025 from $7.10 in 2024, reflecting improved profitability.
  • Market Leadership in Municipal Insurance:: Captured 58% of U.S. new-issue insured par, insuring $27 billion in municipal par and $2 billion in secondary market policies (240% YoY growth).
  • Capital Management Actions:: Repurchased 12% of shares ($500 million) and increased quarterly dividend by 12% to $0.38, distributing $69 million to shareholders.
  • Resolution of Troubled Exposures:: Generated $103 million gain from Lehman litigation and $23 million from loss mitigation strategies, boosting financial stability.
  • Annunity Reinsurance Expansion:: Acquired Warwick Re Limited to launch a new earnings stream, with $160 million in annual pretax income from alternative investments in 2025.

Capital Management and Shareholder Returns

The company continued to return capital to shareholders through share repurchases and dividends. It repurchased 12% of its common shares outstanding, or 5.8 million shares, at an average price of $85.92, for a total of $500 million. The company also distributed $69 million to shareholders through dividends and increased its quarterly dividend per share by 12% to $0.38. As of today, the company's holding company liquidity is approximately $130 million, and its remaining share repurchase authorization is $204 million. According to Dominic John Frederico, the company has a $500 million annual stock buyback target, but the actual buyback amount may be influenced by other market opportunities, particularly in life and annuity reinsurance.

Valuation and Growth Prospects

With a Price-to-Book Ratio (P/B) of 0.77, the company's stock appears to be undervalued relative to its book value. The Dividend Yield is 1.58%, providing a relatively stable source of return for investors. Analysts estimate next year's revenue growth at -1.0%, indicating a potential slowdown in the company's top-line growth. However, the company's efforts to expand into new areas, such as annuity reinsurance, may provide a new source of earnings growth.

Risk Management and Exposures

The company continues to manage its risk exposure effectively, with a significant cushion in the capital stack for its troubled exposures, such as Brightline. According to Benjamin G. Rosenblum, $4 billion of subordination below their position provides a good cushion, and the company remains confident in its ability to recover. The company's alternative investment portfolio, largely composed of CLOs, is also well-managed, with no direct exposure to private credit.

3. NewsRoom

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JPMorgan Chase & Co. Decreases Stock Holdings in Assured Guaranty Ltd. $AGO

Mar -30

Source: defenseworld.net

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Head to Head Contrast: Assured Guaranty (NYSE:AGO) versus World Access (OTCMKTS:WAXS)

Mar -19

Source: defenseworld.net

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Critical Survey: Assured Guaranty (NYSE:AGO) versus Hippo (NYSE:HIPO)

Mar -10

Source: defenseworld.net

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Assured Guaranty Ltd. (AGO) Q4 2025 Earnings Call Transcript

Feb -27

Source: seekingalpha.com

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Assured Guaranty (AGO) Q4 Earnings and Revenues Surpass Estimates

Feb -27

Source: zacks.com

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Assured Guaranty Ltd. Raises Quarterly Dividend by 12% to $0.38 per Common Share

Feb -20

Source: businesswire.com

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Assured Guaranty Enters Annuity Reinsurance Market

Jan -21

Source: businesswire.com

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HARBOR CAPITAL ADVISORS, INC. Buys 655 Shares of Assured Guaranty Ltd (AGO)

Jan -20

Source: gurufocus.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.27%)

6. Segments

Insurance

Expected Growth: 4.83%

Assured Guaranty Ltd.'s 4.83% growth in insurance is driven by increasing demand for municipal bond insurance, expansion into new markets, and a strong brand reputation. Additionally, the company's diversified portfolio, effective risk management, and strategic partnerships have contributed to its growth. Furthermore, the rising need for credit enhancement in the municipal bond market has also fueled the company's growth.

Corporate

Expected Growth: 4.65%

Assured Guaranty Ltd.'s 4.65% growth is driven by increasing demand for municipal bond insurance, expansion into new markets, and strategic acquisitions. Additionally, the company's strong risk management practices, diversified investment portfolio, and solid capital position contribute to its growth momentum.

Reconciling Items

Expected Growth: 8.3%

Assured Guaranty Ltd.'s 8.3% growth is driven by increasing demand for municipal bond insurance, expansion into new markets, and a strong track record of claims-paying ability. Additionally, the company's disciplined underwriting approach and active capital management have contributed to its growth. Furthermore, the company's diversified portfolio and strategic partnerships have also played a key role in achieving this level of growth.

Asset Management

Expected Growth: 5.83%

Assured Guaranty Ltd.'s 5.83% growth in Asset Management is driven by increasing demand for municipal bond insurance, expansion into new markets, and strategic partnerships. Additionally, the company's strong risk management practices, diversified investment portfolio, and cost savings initiatives have contributed to its growth.

Other

Expected Growth: 8.37%

Assured Guaranty Ltd.'s 8.37% growth is driven by increasing demand for municipal bond insurance, expansion into new markets, and strategic acquisitions. Additionally, the company's strong risk management practices, diversified portfolio, and solid capital position contribute to its growth momentum.

7. Detailed Products

Municipal Bond Insurance

Assured Guaranty provides financial guaranty insurance for municipal bonds, protecting investors from default risk and enhancing credit quality.

Structured Finance Insurance

Assured Guaranty offers insurance for structured finance transactions, such as asset-backed securities and collateralized loan obligations.

Aircraft Lease Insurance

Assured Guaranty provides insurance for aircraft leases, protecting lessors from default risk and enhancing the credit quality of the lease.

International Infrastructure Insurance

Assured Guaranty offers insurance for international infrastructure projects, such as transportation, energy, and social infrastructure.

Reinsurance

Assured Guaranty provides reinsurance for other insurance companies, helping them manage risk and enhance their capital positions.

8. Assured Guaranty Ltd.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Assured Guaranty Ltd. operates in a niche market, providing financial guaranty insurance and reinsurance. While there are some substitutes available, the company's specialized products and services reduce the threat of substitutes.

Bargaining Power Of Customers

Assured Guaranty Ltd.'s customers are primarily institutional investors and financial institutions, which have limited bargaining power due to the company's specialized products and services.

Bargaining Power Of Suppliers

Assured Guaranty Ltd. has a diversified supplier base, and the company's suppliers have limited bargaining power due to the availability of alternative suppliers.

Threat Of New Entrants

The financial guaranty insurance and reinsurance market has high barriers to entry, including regulatory requirements and capital requirements, which reduce the threat of new entrants.

Intensity Of Rivalry

Assured Guaranty Ltd. operates in a competitive market, but the company's specialized products and services, as well as its strong brand reputation, help to mitigate the intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 23.04%
Debt Cost 4.66%
Equity Weight 76.96%
Equity Cost 9.66%
WACC 8.51%
Leverage 29.93%

11. Quality Control: Assured Guaranty Ltd. passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Fidelity National Financial

A-Score: 7.0/10

Value: 7.9

Growth: 6.2

Quality: 6.3

Yield: 8.0

Momentum: 5.0

Volatility: 8.7

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MGIC

A-Score: 6.9/10

Value: 6.7

Growth: 6.4

Quality: 8.2

Yield: 4.0

Momentum: 7.0

Volatility: 9.3

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Essent Group

A-Score: 6.8/10

Value: 6.9

Growth: 6.3

Quality: 6.7

Yield: 4.0

Momentum: 7.0

Volatility: 9.7

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Assured Guaranty

A-Score: 6.2/10

Value: 5.7

Growth: 5.7

Quality: 7.3

Yield: 4.0

Momentum: 5.5

Volatility: 9.3

1-Year Total Return ->

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NMI Holdings

A-Score: 6.2/10

Value: 6.9

Growth: 7.6

Quality: 9.0

Yield: 0.0

Momentum: 4.5

Volatility: 9.0

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Assurant

A-Score: 6.1/10

Value: 6.1

Growth: 6.1

Quality: 6.3

Yield: 4.0

Momentum: 6.0

Volatility: 8.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

81.1$

Current Price

81.1$

Potential

-0.00%

Expected Cash-Flows