Assured Guaranty (NYSE: AGO) and Essent Group (NYSE:ESNT) are both mid-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, valuation, institutional ownership, profitability, earnings and dividends.
Institutional & Insider Ownership
97.8% of Assured Guaranty shares are held by institutional investors. Comparatively, 89.0% of Essent Group shares are held by institutional investors. 2.6% of Assured Guaranty shares are held by company insiders. Comparatively, 3.0% of Essent Group shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Assured Guaranty pays an annual dividend of $0.64 per share and has a dividend yield of 1.7%. Essent Group does not pay a dividend. Assured Guaranty has increased its dividend for 6 consecutive years.
Risk & Volatility
Assured Guaranty has a beta of 1.31, indicating that its stock price is 31% more volatile than the S&P 500. Comparatively, Essent Group has a beta of 1.17, indicating that its stock price is 17% more volatile than the S&P 500.
Earnings & Valuation
This table compares Assured Guaranty and Essent Group’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Assured Guaranty||$1.74 billion||2.44||$730.00 million||N/A||N/A|
|Essent Group||$576.51 million||5.74||$379.74 million||$3.10||10.87|
Assured Guaranty has higher revenue and earnings than Essent Group.
This table compares Assured Guaranty and Essent Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a breakdown of current ratings and recommmendations for Assured Guaranty and Essent Group, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Assured Guaranty currently has a consensus target price of $48.00, indicating a potential upside of 30.26%. Essent Group has a consensus target price of $51.07, indicating a potential upside of 51.49%. Given Essent Group’s higher probable upside, analysts plainly believe Essent Group is more favorable than Assured Guaranty.
Essent Group beats Assured Guaranty on 8 of the 15 factors compared between the two stocks.
About Assured Guaranty
Assured Guaranty Ltd., through its subsidiaries, provides credit protection products to public finance, infrastructure, and structured finance markets in the United States and internationally. It offers financial guaranty insurance that protects holders of debt instruments and other monetary obligations from defaults in scheduled payments. The company insures various debt obligations, including bonds issued by the United States state or municipal governmental authorities; and notes issued to finance infrastructure projects. It also insures and reinsures various types of the United States public finance obligations, such as general obligation, tax-backed, municipal utility, transportation, healthcare, higher education, infrastructure, housing revenue, investor-owned utility, and other public finance bonds; and various types of non-United States public finance obligations comprising infrastructure finance, regulated utilities, pooled infrastructure, and other public finance obligations. In addition, the company insures and reinsures various types of the United States and non-United States structured finance obligations, including pooled corporate obligations, residential mortgage-backed securities, insurance securitization obligations, consumer receivables securities, financial products, commercial receivables securities, commercial mortgage-backed securities, and other structured finance securities. It markets its financial guaranty insurance directly to issuers and underwriters of public finance and structured finance securities, as well as to investors in such obligations. Assured Guaranty Ltd. was founded in 2003 and is headquartered in Hamilton, Bermuda.
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. 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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