Comparing Essent Group (ESNT) & NMI (NMIH)

Essent Group (NYSE: ESNT) and NMI (NASDAQ:NMIH) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, profitability, risk, analyst recommendations, institutional ownership, dividends and earnings.

Analyst Recommendations

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This is a breakdown of recent ratings and recommmendations for Essent Group and NMI, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Essent Group 0 1 10 0 2.91
NMI 0 0 8 0 3.00

Essent Group presently has a consensus target price of $52.28, indicating a potential upside of 48.38%. NMI has a consensus target price of $20.38, indicating a potential upside of 41.00%. Given Essent Group’s higher probable upside, research analysts plainly believe Essent Group is more favorable than NMI.

Volatility and Risk

Essent Group has a beta of 1.17, indicating that its stock price is 17% more volatile than the S&P 500. Comparatively, NMI has a beta of 0.88, indicating that its stock price is 12% less volatile than the S&P 500.

Institutional and Insider Ownership

88.4% of Essent Group shares are owned by institutional investors. Comparatively, 83.8% of NMI shares are owned by institutional investors. 3.0% of Essent Group shares are owned by insiders. Comparatively, 5.7% of NMI shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Essent Group and NMI’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Essent Group $576.51 million 5.99 $379.74 million $3.10 11.36
NMI $182.74 million 5.15 $22.05 million $0.57 25.35

Essent Group has higher revenue and earnings than NMI. Essent Group is trading at a lower price-to-earnings ratio than NMI, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Essent Group and NMI’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Essent Group 65.87% 17.77% 12.67%
NMI 12.07% 7.89% 4.53%

Summary

Essent Group beats NMI on 11 of the 14 factors compared between the two stocks.

Essent Group Company Profile

Essent Group Ltd., through its subsidiaries, provides private mortgage insurance and reinsurance for mortgages secured by residential properties located in the United States. The company also provides information technology maintenance and development services; customer support-related services; and contract underwriting services. It serves originators of residential mortgage loans, such as regulated depository institutions, mortgage banks, credit unions, and other lenders. The company was founded in 2008 and is based in Hamilton, Bermuda.

NMI Company Profile

NMI Holdings, Inc., through its subsidiaries, provides private mortgage guaranty insurance services in the United States. The company offers mortgage insurance; reinsurance on loans; and outsourced loan review services to mortgage loan originators. It serves national and regional mortgage banks, money center banks, credit unions, community banks, builder-owned mortgage lenders, Internet-sourced lenders, and other non-bank lenders. The company was founded in 2011 and is headquartered in Emeryville, California.

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