MGIC Investment (MTG) & Essent Group (ESNT) Head-To-Head Review

MGIC Investment (NYSE: MTG) and Essent Group (NYSE:ESNT) are both mid-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their analyst recommendations, valuation, profitability, dividends, earnings, institutional ownership and risk.

Valuation & Earnings

This table compares MGIC Investment and Essent Group’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
MGIC Investment $1.07 billion 3.65 $355.76 million $1.36 7.71
Essent Group $576.51 million 5.92 $379.74 million $3.10 11.22

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

Institutional and Insider Ownership

91.4% of MGIC Investment shares are owned by institutional investors. Comparatively, 89.9% of Essent Group shares are owned by institutional investors. 1.0% of MGIC Investment shares are owned by company insiders. Comparatively, 3.0% of Essent Group shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings for MGIC Investment and Essent Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MGIC Investment 0 3 10 0 2.77
Essent Group 0 1 9 0 2.90

MGIC Investment presently has a consensus target price of $15.94, indicating a potential upside of 51.93%. Essent Group has a consensus target price of $51.75, indicating a potential upside of 48.84%. Given MGIC Investment’s higher probable upside, equities research analysts plainly believe MGIC Investment is more favorable than Essent Group.

Profitability

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

Net Margins Return on Equity Return on Assets
MGIC Investment 38.25% 17.43% 9.69%
Essent Group 68.82% 18.80% 13.49%

Volatility & Risk

MGIC Investment has a beta of 1.98, suggesting that its stock price is 98% more volatile than the S&P 500. Comparatively, Essent Group has a beta of 1.2, suggesting that its stock price is 20% more volatile than the S&P 500.

Summary

Essent Group beats MGIC Investment on 9 of the 14 factors compared between the two stocks.

MGIC Investment Company Profile

MGIC Investment Corporation, through its subsidiaries, provides private mortgage insurance and ancillary services to lenders and government sponsored entities in the United States. The company offers primary mortgage insurance that provides mortgage default protection on individual loans, as well as covers unpaid loan principal, delinquent interest, and various expenses associated with the default and subsequent foreclosure. It also provides contract underwriting services; and other services for the mortgage finance industry, such as analysis of loan originations and portfolios, and mortgage lead generation services, as well as reinsurance arrangements. The company serves originators of residential mortgage loans, including savings institutions, commercial banks, mortgage brokers, credit unions, mortgage bankers, and other lenders. MGIC Investment Corporation was founded in 1957 and is headquartered in Milwaukee, Wisconsin.

Essent Group Company Profile

Essent Group Ltd., through its subsidiaries, provides private mortgage insurance and reinsurance for mortgages secured by residential properties located in the United States. The company also provides information technology maintenance and development services; customer support-related services; and contract underwriting services. It serves originators of residential mortgage loans, such as regulated depository institutions, mortgage banks, credit unions, and other lenders. The company was founded in 2008 and is based in Hamilton, Bermuda.

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