RLI vs ACGL

For growth investors, Arch Capital Group Ltd.

(ACGL) is the stronger pick with 14. 3% revenue growth year-over-year, versus 6. 3% for RLI Corp. (RLI). Arch Capital Group Ltd. (ACGL) offers the better valuation at 8. 1x trailing P/E (10. 1x forward), making it the more compelling value choice. Analysts rate Arch Capital Group Ltd. (ACGL) a "Buy" — based on 34 analyst ratings — the highest consensus in this comparison. The "better buy" depends entirely on your goals: growth investors should weight revenue trajectory, value investors should weight P/E and PEG, and income investors should weight dividend yield and streak.

On trailing P/E, Arch Capital Group Ltd.

(ACGL) is the cheapest at 8. 1x versus RLI Corp. at 11. 2x. On forward P/E, Arch Capital Group Ltd. is actually cheaper at 10. 1x. The PEG ratio (P/E divided by earnings growth rate) is the most growth-adjusted single valuation metric: Arch Capital Group Ltd. wins at 0. 35x versus RLI Corp. 's 0. 87x — a PEG below 1. 0 traditionally signals the market is underpricing earnings growth.

Over the past 5 years, Arch Capital Group Ltd.

(ACGL) delivered a total return of +150. 7%, compared to +8. 5% for RLI Corp. (RLI). Over 10 years, the gap is even starker: ACGL returned +325. 3% versus RLI's +106. 8%. Past returns do not guarantee future results, and the stock with the higher historical return may already have its best growth priced in.

By beta (market sensitivity over 5 years), RLI Corp.

(RLI) is the lower-risk stock at -0. 01β versus Arch Capital Group Ltd. 's 0. 02β — meaning ACGL is approximately -359% more volatile than RLI relative to the S&P 500. On balance sheet safety, RLI Corp. (RLI) carries a lower debt/equity ratio of 6% versus 11% for Arch Capital Group Ltd. — giving it more financial flexibility in a downturn.

By revenue growth (latest reported year), Arch Capital Group Ltd.

(ACGL) is pulling ahead at 14. 3% versus 6. 3% for RLI Corp. (RLI). On earnings-per-share growth, the picture is similar: RLI Corp. grew EPS 16. 6% year-over-year, compared to 3. 8% for Arch Capital Group Ltd.. Over a 3-year CAGR, ACGL leads at 27. 3% annualised revenue growth. Higher growth typically commands a higher valuation multiple — check whether the premium P/E or P/S is justified by the growth rate using the PEG ratio.

Arch Capital Group Ltd.

(ACGL) is the more profitable company, earning 22. 1% net margin versus 21. 4% for RLI Corp. — meaning it keeps 22. 1% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: RLI leads at 27. 5% versus 25. 0% for ACGL. At the gross margin level — before operating expenses — ACGL leads at 37. 2%, reflecting greater pricing power or product mix advantage. Stronger margins indicate durable pricing power, lower cost of revenue, or higher mix of software/services. They are one of the clearest signs of business quality.

The PEG ratio (forward P/E divided by expected earnings growth rate) is the most precise measure of undervaluation relative to growth potential.

By this metric, Arch Capital Group Ltd. (ACGL) is the more undervalued stock at a PEG of 0. 35x versus RLI Corp. 's 0. 87x. A PEG below 1. 0 is traditionally considered the threshold for growth-adjusted undervaluation. On forward earnings alone, Arch Capital Group Ltd. (ACGL) trades at 10. 1x forward P/E versus 17. 7x for RLI Corp. — 7. 6x cheaper on a one-year earnings basis. Analyst consensus price targets imply the most upside for RLI: 14. 9% to $56. 33.

In this comparison, RLI (5.

3% yield) pays a dividend. ACGL does not pay a meaningful dividend and should not be held primarily for income.

For long-horizon retirement investors, RLI Corp.

(RLI) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding (low volatility (β -0. 01), 5. 3% yield, +106. 8% 10Y return). Both have compounded well over 10 years (RLI: +106. 8%, ACGL: +325. 3%), confirming both are viable long-term holds — but the lower-volatility option typically results in less emotional selling during corrections. Retirement portfolios generally favour predictability over maximum returns. Consult a financial advisor before making allocation decisions.

Both stocks operate in the Financial Services sector, making this a peer-level intra-sector comparison — the same macro tailwinds and headwinds will affect both.

RLI pays a dividend while ACGL does not, making them suitable for different income and tax situations. These fundamental differences mean investors should not choose between them on a single metric — the "better stock" depends entirely on which of these characteristics aligns with your investment strategy.