Finance of America Companies (NYSE:FOA – Get Free Report) and Essent Group (NYSE:ESNT – Get Free Report) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, profitability, dividends, valuation, analyst recommendations, institutional ownership and risk.
Institutional and Insider Ownership
97.2% of Finance of America Companies shares are held by institutional investors. Comparatively, 93.0% of Essent Group shares are held by institutional investors. 35.4% of Finance of America Companies shares are held by insiders. Comparatively, 3.6% of Essent Group shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Profitability
This table compares Finance of America Companies and Essent Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Finance of America Companies | -0.10% | 28.39% | 0.35% |
| Essent Group | 51.45% | 11.91% | 9.09% |
Analyst Ratings
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Finance of America Companies | 2 | 1 | 2 | 0 | 2.00 |
| Essent Group | 0 | 5 | 3 | 0 | 2.38 |
Finance of America Companies presently has a consensus price target of $30.50, suggesting a potential upside of 102.04%. Essent Group has a consensus price target of $71.86, suggesting a potential upside of 4.50%. Given Finance of America Companies’ higher possible upside, research analysts clearly believe Finance of America Companies is more favorable than Essent Group.
Risk and Volatility
Finance of America Companies has a beta of 1.65, meaning that its share price is 65% more volatile than the S&P 500. Comparatively, Essent Group has a beta of 0.76, meaning that its share price is 24% less volatile than the S&P 500.
Valuation and Earnings
This table compares Finance of America Companies and Essent Group”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Finance of America Companies | $239.69 million | 1.09 | $45.24 million | ($3.01) | -5.02 |
| Essent Group | $1.26 billion | 4.90 | $689.97 million | $7.17 | 9.59 |
Essent Group has higher revenue and earnings than Finance of America Companies. Finance of America Companies is trading at a lower price-to-earnings ratio than Essent Group, indicating that it is currently the more affordable of the two stocks.
Summary
Essent Group beats Finance of America Companies on 9 of the 14 factors compared between the two stocks.
About Finance of America Companies
Finance of America Companies Inc. a financial service holding company, through its subsidiaries, engages in the operation of a retirement solutions platform in the United States. It operates through two segments: Retirement Solutions and Portfolio Management. The Retirement Solutions segment engages in the loan origination activities comprising home equity conversion, proprietary reverse, and hybrid mortgage loans for senior homeowners. The Portfolio Management segment provides product development, loan securitization, loan sales, risk management, servicing oversight, and asset management services for borrowers and investors. The company was founded in 2013 and is headquartered in Plano, Texas.
About Essent Group
Essent Group Ltd., through its subsidiaries, provides private mortgage insurance and reinsurance for mortgages secured by residential properties located in the United States. Its mortgage insurance products include primary, pool, and master policy. The company also provides information technology maintenance and development services; customer support-related services; underwriting consulting; and contract underwriting services, as well as risk management products and title insurance and settlement services. It serves the originators of residential mortgage loans, such as regulated depository institutions, mortgage banks, credit unions, and other lenders. Essent Group Ltd. was incorporated in 2008 and is based in Hamilton, Bermuda.
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