Essent Group (NYSE: ESNT) and The Navigators Group (NASDAQ:NAVG) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their valuation, dividends, profitability, earnings, risk, analyst recommendations and institutional ownership.

Institutional and Insider Ownership

81.4% of Essent Group shares are owned by institutional investors. Comparatively, 73.9% of The Navigators Group shares are owned by institutional investors. 18.1% of Essent Group shares are owned by company insiders. Comparatively, 24.1% of The Navigators Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Essent Group 50.92% 18.77% 13.32%
The Navigators Group 6.86% 6.53% 1.60%

Dividends

The Navigators Group pays an annual dividend of $0.24 per share and has a dividend yield of 0.4%. Essent Group does not pay a dividend. The Navigators Group pays out 8.5% of its earnings in the form of a dividend.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Essent Group $512.83 million 8.11 $362.45 million $2.82 15.78
The Navigators Group $1.24 billion 1.40 $135.66 million $2.83 20.79

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

Risk and Volatility

Essent Group has a beta of 1.14, indicating that its stock price is 14% more volatile than the S&P 500. Comparatively, The Navigators Group has a beta of 0.79, indicating that its stock price is 21% less volatile than the S&P 500.

Analyst Ratings

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Essent Group 0 1 6 0 2.86
The Navigators Group 0 5 0 0 2.00

Essent Group currently has a consensus price target of $44.71, suggesting a potential upside of 0.48%. The Navigators Group has a consensus price target of $57.00, suggesting a potential downside of 3.10%. Given Essent Group’s stronger consensus rating and higher probable upside, equities analysts plainly believe Essent Group is more favorable than The Navigators Group.

Summary

Essent Group beats The Navigators Group on 11 of the 16 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.

The Navigators Group Company Profile

The Navigators Group, Inc. is an insurance holding company. The Company is an international insurance company focused on marine insurance. The Company’s segments include U.S. Insurance, International Insurance (Int’l Insurance), Global Reinsurance (GlobalRe) and Corporate. The Company’s Property and Casualty (P&C) insurance business primarily offers general liability coverage, and umbrella and excess liability coverage to commercial enterprises through its U.S. Insurance and Int’l Insurance segments. It also offers reinsurance products through its GlobalRe segment. It distributes its products through international, national and regional, retail and wholesale insurance brokers. The Company’s U.S. Insurance and Int’l Insurance segments consists of three segments, such as Marine, Property and Casualty (P&C) and Professional Liability. Its GlobalRe products include accident & health (A&H), marine, P&C and professional liability.

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