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

Volatility & Risk

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ORIX has a beta of 1.6, indicating that its share price is 60% more volatile than the S&P 500. Comparatively, Essent Group has a beta of 1.14, indicating that its share price is 14% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
ORIX 10.61% 11.36% 2.71%
Essent Group 65.87% 17.77% 12.67%

Institutional & Insider Ownership

1.8% of ORIX shares are owned by institutional investors. Comparatively, 89.0% of Essent Group shares are owned by institutional investors. 0.1% of ORIX shares are owned by company insiders. Comparatively, 18.1% of Essent Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

ORIX pays an annual dividend of $2.26 per share and has a dividend yield of 2.6%. Essent Group does not pay a dividend. ORIX pays out 209.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Valuation and Earnings

This table compares ORIX and Essent Group’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
ORIX $24.78 billion 0.92 $2.54 billion $1.08 82.01
Essent Group $576.51 million 7.17 $379.74 million $3.96 10.64

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

Analyst Ratings

This is a summary of current ratings and recommmendations for ORIX and Essent Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ORIX 0 0 0 0 N/A
Essent Group 0 1 11 0 2.92

Essent Group has a consensus price target of $53.52, indicating a potential upside of 27.07%. Given Essent Group’s higher possible upside, analysts clearly believe Essent Group is more favorable than ORIX.

Summary

Essent Group beats ORIX on 10 of the 15 factors compared between the two stocks.

About ORIX

ORIX Corporation (ORIX) is a financial services company. The Company operates through six segments: Corporate Financial Services, which consists of lending, leasing and fee business; Maintenance Leasing, which consists of automobile leasing and rentals, car sharing, and test and measurement instruments and information technology-related equipment rentals and leasing; Real Estate, which consists of real estate development and rental, facility operation, real estate investment trust (REIT) asset management, and real estate investment advisory services; Investment and Operation, which consists of environment and energy-related business, principal investment and loan servicing (asset recovery); Retail Segment, which consists of life insurance, banking and card loan business, and Overseas Business, which consists of leasing, lending, investment in bonds, investment banking, asset management and ship- and aircraft-related operations.

About Essent Group

Essent Group Ltd. is a private mortgage insurance company. The Company is engaged in offering private mortgage insurance and reinsurance for mortgages secured by residential properties located in the United States. Its products and services include mortgage insurance, contract underwriting, and Bermuda-based insurance and reinsurance. The Company’s primary mortgage insurance is offered to customers on individual loans at the time of origination on a flow basis, but can also be written in bulk transactions. Its pool insurance provides additional credit enhancement for certain secondary market and other mortgage transactions. The primary mortgage insurance operations were conducted through Essent Guaranty, Inc. which is a mortgage insurer licensed to write mortgage insurance in all 50 states and the District of Columbia, as of December 31, 2016. It offers primary mortgage insurance, pool insurance and master policy. It provides contract underwriting services through CUW Solutions, LLC.

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