Essent Group (NYSE: ESNT) and Old Republic International Corporation (NYSE:ORI) are both mid-cap financials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, risk, profitability, valuation and earnings.

Risk & Volatility

Essent Group has a beta of 1.15, suggesting that its share price is 15% more volatile than the S&P 500. Comparatively, Old Republic International Corporation has a beta of 1.36, suggesting that its share price is 36% more volatile than the S&P 500.

Valuation & Earnings

This table compares Essent Group and Old Republic International Corporation’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Essent Group $458.26 million 9.64 $222.60 million $2.98 15.07
Old Republic International Corporation $5.90 billion 0.93 $467.00 million $1.35 15.39

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

Dividends

Old Republic International Corporation pays an annual dividend of $0.76 per share and has a dividend yield of 3.7%. Essent Group does not pay a dividend. Old Republic International Corporation pays out 56.3% of its earnings in the form of a dividend. Essent Group has increased its dividend for 35 consecutive years.

Profitability

This table compares Essent Group and Old Republic International Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Essent Group 51.64% 18.55% 13.15%
Old Republic International Corporation 6.45% 7.50% 1.81%

Insider & Institutional Ownership

82.5% of Essent Group shares are held by institutional investors. Comparatively, 71.8% of Old Republic International Corporation shares are held by institutional investors. 18.1% of Essent Group shares are held by company insiders. Comparatively, 2.0% of Old Republic International Corporation shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations and price targets for Essent Group and Old Republic International Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Essent Group 0 2 5 0 2.71
Old Republic International Corporation 0 0 0 1 4.00

Essent Group presently has a consensus target price of $45.00, suggesting a potential upside of 0.22%. Old Republic International Corporation has a consensus target price of $25.00, suggesting a potential upside of 20.37%. Given Old Republic International Corporation’s stronger consensus rating and higher probable upside, analysts clearly believe Old Republic International Corporation is more favorable than Essent Group.

Summary

Essent Group beats Old Republic International Corporation on 10 of the 18 factors compared between the two stocks.

Essent Group Company Profile

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.

Old Republic International Corporation Company Profile

Old Republic International Corporation is a holding company. The Company is engaged in business of insurance underwriting and related services. The Company conducts its operations through various regulated insurance company subsidiaries, which are organized into three segments: General Insurance Group, Title Insurance Group and the Republic Financial Indemnity Group (RFIG) Run-off Business. The Company’s General Insurance segment consists of property and liability insurance, and offers coverages to businesses, government and other institutions. The Company’s Title Insurance Group business consists of the issuance of policies to real estate purchasers and investors based upon searches of the public records, which contain information concerning interests in real property. The Company’s RFIG run-off business consists of its mortgage guaranty and consumer credit indemnity (CCI) operations.

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