Essent Group (NYSE:ESNT) versus loanDepot (NYSE:LDI) Head to Head Review

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

Insider and Institutional Ownership

93.0% of Essent Group shares are owned by institutional investors. Comparatively, 39.4% of loanDepot shares are owned by institutional investors. 3.6% of Essent Group shares are owned by company insiders. Comparatively, 65.9% of loanDepot shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Volatility and Risk

Essent Group has a beta of 0.76, meaning that its share price is 24% less volatile than the S&P 500. Comparatively, loanDepot has a beta of 3.4, meaning that its share price is 240% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for Essent Group and loanDepot, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Essent Group	0	5	3	0	2.38
loanDepot	3	2	0	0	1.40

Essent Group currently has a consensus target price of $71.86, suggesting a potential upside of 4.50%. loanDepot has a consensus target price of $1.92, suggesting a potential upside of 129.82%. Given loanDepot’s higher possible upside, analysts clearly believe loanDepot is more favorable than Essent Group.

Valuation and Earnings

This table compares Essent Group and loanDepot”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Essent Group	$1.35 billion	4.58	$689.97 million	$7.17	9.59
loanDepot	$1.19 billion	0.24	-$62.65 million	($0.30)	-2.78

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Essent Group	51.45%	11.91%	9.09%
loanDepot	-5.52%	-28.25%	-1.56%

Summary

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

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.

About loanDepot

loanDepot, Inc. engages in originating, financing, selling, and servicing residential mortgage loans in the United States. The company offers conventional agency-conforming and prime jumbo, federal assistance residential mortgage, and home equity loans. It also provides settlement services, which include captive title and escrow business; real estate services that cover captive real estate referral business; and insurance services, including services to homeowners, as well as other consumer insurance policies. The company was founded in 2010 and is headquartered in Irvine, California.