Assured Guaranty Intrinsic Value Calculator – Assured Guaranty Facing $10 Billion Exposure to UK Water Utilities
July 14, 2023
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Assured Guaranty ($NYSE:AGO) Ltd is a Bermuda-based financial services company that provides credit enhancement products to public finance, infrastructure finance, and structured finance markets. The company is currently facing a $10 billion exposure to UK water utilities. This is due to the fact that Assured Guaranty has provided financial guarantees for certain of the debt issued by various UK water utilities. This comes at a time when the UK water sector is facing several issues, including regulatory changes and declining customer demand. As a result, these water utilities are facing significant financial pressure and Assured Guaranty is bearing the brunt of it through their $10 billion exposure. Assured Guaranty has taken steps to manage their exposure, such as reducing their exposures to certain UK water utilities and diversifying their investments into other sectors.
However, it remains to be seen how this will impact their overall financial position. Considering the large exposure to UK water utilities, investors are concerned about the future of Assured Guaranty and how it will affect their investments. It is important for investors to keep an eye on the progress of the company and make sure that it is taking the necessary steps to mitigate its risk.
Stock Price
On Thursday, ASSURED GUARANTY stock opened at $55.7 and closed at $57.1, up by 1.9% from its previous closing price of 56.0. This positive reaction by investors is due to the potential high value and long-term revenue that the UK water utilities exposure could bring. While some may view this as a major risk for ASSURED GUARANTY, the company is confident in their ability to handle the exposure and look to the future with optimism. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Assured Guaranty. More…
| Total Revenues | Net Income | Net Margin |
| 634 | 138 | 21.9% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Assured Guaranty. More…
| Operations | Investing | Financing |
| -2.48k | 1.74k | 612 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Assured Guaranty. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 16.78k | 11.36k | 88.01 |
Key Ratios Snapshot
Some of the financial key ratios for Assured Guaranty are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| -9.2% | – | 40.5% |
| FCF Margin | ROE | ROA |
| -391.0% | 3.1% | 1.0% |
Analysis – Assured Guaranty Intrinsic Value Calculator
GoodWhale has conducted an analysis of ASSURED GUARANTY‘s fundamentals, and our proprietary Valuation Line reveals that the intrinsic value of ASSURED GUARANTY shares is around $54.3. At the moment, ASSURED GUARANTY stock is trading at $57.1, making it a fair price that is moderately overvalued by 5.1%. More…
Peers
The Company’s principal subsidiaries include Assured Guaranty Municipal Corp, which provides financial guarantees for municipal bonds, and Assured Guaranty Re Ltd, which provides reinsurance for credit enhancement providers. The Company’s competitors include MBIA Inc, Menora Mivtachim Holdings Ltd, American Overseas Group Ltd, among others.
– MBIA Inc ($NYSE:MBI)
MBIA Inc is a holding company that, through its subsidiaries, provides financial guarantee insurance services in the United States and internationally. The company has a market cap of $547.9 million and a return on equity of 20.66%. MBIA Inc operates in two segments: Insurance Services and Financial Services. The Insurance Services segment provides financial guarantees for bonds, notes, and other obligations issued by municipalities, utilities, school districts, housing authorities, and various other governmental entities and public finance sectors. The Financial Services segment offers investment management, loan servicing, and real estate services.
– Menora Mivtachim Holdings Ltd ($OTCPK:MNRHF)
Menora Mivtachim Holdings Ltd is an Israeli conglomerate with interests in insurance, banking, and investment. The company has a market capitalization of 1.2 billion as of 2022 and a return on equity of 9.76%. Menora Mivtachim Holdings is a publicly traded company on the Tel Aviv Stock Exchange. The company was founded in 1934 and is headquartered in Tel Aviv, Israel.
– American Overseas Group Ltd ($OTCPK:AOREF)
AOG is a Bermuda-based holding company engaged in the insurance and reinsurance businesses through its subsidiaries. The Company’s segments include Property and Casualty, which provides insurance and reinsurance products for commercial and personal lines of business; Specialty, which provides insurance and reinsurance products for specialty lines of business, such as professional liability, surety, political risk, and medical malpractice; and Life, which provides life insurance products.
Summary
Assured Guaranty is a financial services company exposed to $10 billion in UK water utility investments. Investors should be aware of the associated risks with this kind of exposure, including possible liquidity issues and counterparty risks. It is important to do a thorough analysis of Assured Guaranty’s financials and business operations to understand their ability to withstand losses on these investments.
Additionally, it is important to look at the performance of the underlying water utilities and UK regulatory environment to gauge the potential impact on Assured Guaranty’s exposure. By evaluating the company’s balance sheet, capital structure, and portfolio of investments, investors can be better informed when considering Assured Guaranty as an investment.
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