Axis Capital Holdings Ltd (NYSE: AXS)

Sector: Financial Services Industry: Insurance - Specialty CIK: 0001214816
Market Cap 8.73 Bn
P/B 1.37
P/E 8.89
P/S 1.39
ROIC (Qtr) 13.03
Div Yield % 1.21
Rev 1y % (Qtr) 3.94
Total Debt (Qtr) 1.49 Bn
Debt/Equity (Qtr) 0.23

About

AXIS Capital Holdings Limited, frequently referred to as AXIS Capital, is a global specialty underwriter and provider of insurance and reinsurance solutions. The company operates in various countries and regions, including Bermuda, the United States, Europe, Singapore, and Canada, and is a leader in many of the markets where it chooses to compete. AXIS Capital's main business activities revolve around providing insurance and reinsurance solutions to a diverse range of clients, including insurance companies, brokers, and other financial institutions....

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Price action

Investment thesis

Bull case

  • Strong tangible asset base of 34.10B provides 22.86x coverage of total debt 1.49B, indicating robust asset backing and low credit risk.
  • Tangible assets of 34.10B provide exceptional 5.69x coverage of deferred revenue 5.99B, showing strong service capability backing.
  • Retained earnings of 7.93B provide strong 33.77x coverage of intangibles 234.94M, indicating quality earnings retention.
  • Strong tangible asset base of 34.10B provides 145.15x coverage of intangibles 234.94M, indicating robust asset quality.
  • Retained earnings of 7.93B represent substantial 1.25x of equity 6.37B, indicating strong internal capital generation.

Bear case

  • Operating cash flow of (315.75M) barely covers its investment activities of 1.10B, with a coverage ratio of -0.29, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of (315.75M) provides insufficient coverage of deferred revenue obligations of 5.99B, which is -0.05x, raising concerns about future service delivery capabilities.
  • The company's operating cash flow of (315.75M) shows concerning coverage of stock compensation expenses of 43.39M, with a -7.28 ratio indicating potential earnings quality issues.
  • Operating cash flow of (315.75M) provides minimal -2.09x coverage of tax expenses of 151.36M, suggesting potential tax planning inefficiencies or unsustainable tax positions.
  • Operating cash flow of (315.75M) barely covers operating expenses of 1.11B with a -0.28 ratio, suggesting thin operational efficiency margins and limited flexibility.

Peer comparison

Companies in the Insurance - Specialty
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 FNF Fidelity National Financial, Inc. 14.91 Bn 12.76 1.06 4.77 Bn
2 AXS Axis Capital Holdings Ltd 8.73 Bn 8.89 1.39 1.49 Bn
3 MTG Mgic Investment Corp 7.13 Bn 9.46 5.86 0.65 Bn
4 ESNT Essent Group Ltd. 6.66 Bn 9.47 5.27 0.49 Bn
5 RYAN Ryan Specialty Holdings, Inc. 6.64 Bn 96.02 2.24 3.58 Bn
6 FAF First American Financial Corp 6.33 Bn 13.13 0.89 2.85 Bn
7 ACT Enact Holdings, Inc. 6.06 Bn 9.19 4.95 0.74 Bn
8 RDN Radian Group Inc 5.23 Bn 9.08 4.17 1.13 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.26 0.71
EV to Cash from Ops. EV/CFO -27.97 14.19
EV to Debt EV to Debt 5.92 23.24
EV to EBIT EV/EBIT 7.17 18.43
EV to EBITDA EV/EBITDA 6.79 16.13
EV to Free Cash Flow [EV/FCF] EV/FCF -27.97 16.11
EV to Market Cap EV to Market Cap 1.01 1.73
EV to Revenue EV/Rev 1.40 5.55
Price to Book Value [P/B] P/B 1.37 1.80
Price to Earnings [P/E] P/E 8.91 15.04
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 5.58 2.59
Dividend Payout Ratio % Div Payout % (Qtr) 10.80 38.44
Dividend per Basic Share Div per Share (Qtr) 1.32 2.02
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) -32.45 72.23
Interest Coverage Int. cover (Qtr) 18.49 24.83
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex Growth (1y) % 0.00 -23.94
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -7.70 -13.37
Dividend Growth (1y) % Div 1y % (Qtr) -25.00 6.74
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 47.82 22.43
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 60.28 10.45
EBIT Growth (1y) % EBIT 1y % (Qtr) 93.24 35.06
EBT Growth (1y) % EBT 1y % (Qtr) 105.12 50.45
EPS Growth (1y) % EPS 1y % (Qtr) 68.41 37.38
FCF Growth (1y) % FCF 1y % (Qtr) -118.16 -3.02
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 22.17 11.39
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.18 0.23
Cash Payout Ratio Cash Payout (Qtr) -0.42 0.51
Cash Ratio Cash Ratio 0.00 0.00
Current Ratio Current Ratio 0.00 0.06
Debt to Equity Ratio Debt/Equity (Qtr) 0.23 0.51
Interest Cover Ratio Int Coverage (Qtr) 18.49 24.83
Times Interest Earned Times Interest Earned (Qtr) 18.49 24.83
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 20.40 36.49
EBIT Margin % EBIT Margin % (Qtr) 19.53 34.57
EBT Margin % EBT Margin % (Qtr) 18.48 17.61
Gross Margin % Gross Margin % (Qtr) 48.20 74.55
Net Profit Margin % Net Margin % (Qtr) 15.60 10.79