Financial Analysis: Essent Group (ESNT) vs. Berkshire Hathaway (BRK.A)
Essent Group (NYSE: ESNT) and Berkshire Hathaway (NYSE:BRK.A) are both mid-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, analyst recommendations, earnings, dividends and profitability.
This table compares Essent Group and Berkshire Hathaway’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Earnings and Valuation
This table compares Essent Group and Berkshire Hathaway’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Essent Group||$512.83 million||7.12||$362.45 million||$2.82||13.86|
Essent Group has higher revenue and earnings than Berkshire Hathaway. Berkshire Hathaway is trading at a lower price-to-earnings ratio than Essent Group, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of recent ratings and target prices for Essent Group and Berkshire Hathaway, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Essent Group presently has a consensus target price of $43.83, indicating a potential upside of 12.16%. Berkshire Hathaway has a consensus target price of $295,000.00, indicating a potential upside of Infinity. Given Berkshire Hathaway’s higher possible upside, analysts plainly believe Berkshire Hathaway is more favorable than Essent Group.
Risk & Volatility
Essent Group has a beta of 1.14, indicating that its stock price is 14% more volatile than the S&P 500. Comparatively, Berkshire Hathaway has a beta of 0.87, indicating that its stock price is 13% less volatile than the S&P 500.
Institutional & Insider Ownership
81.4% of Essent Group shares are owned by institutional investors. Comparatively, 26.6% of Berkshire Hathaway shares are owned by institutional investors. 18.1% of Essent Group shares are owned by insiders. Comparatively, 5.4% of Berkshire Hathaway shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Essent Group beats Berkshire Hathaway on 9 of the 12 factors compared between the two stocks.
About Essent Group
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.
About Berkshire Hathaway
Berkshire Hathaway Inc. is a holding company owning subsidiaries engaged in various business activities. Its segments include Insurance, such as GEICO, Berkshire Hathaway Primary Group, General Re Corporation and Berkshire Hathaway Reinsurance Group; Burlington Northern Santa Fe, LLC, which is engaged in the operation of the railroad system; Berkshire Hathaway Energy, which includes regulated electric and gas utility; Manufacturing, which includes manufacturers of various products, including industrial, consumer and building products; McLane Company, which is engaged in the wholesale distribution of groceries and non-food items; Service and retailing, which includes providers of various services, including fractional aircraft ownership programs, aviation pilot training and various retailing businesses, and Finance and financial products, which includes manufactured housing and related consumer financing, transportation equipment, manufacturing and leasing, and furniture leasing.
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