Head-To-Head Analysis: Essent Group (ESNT) vs. Allied World Assurance (AWHHF)

Essent Group (NYSE: ESNT) and Allied World Assurance (OTCMKTS:AWHHF) are both mid-cap financials companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, profitability, risk, earnings, valuation and institutional ownership.

Institutional and Insider Ownership

85.8% of Essent Group shares are owned by institutional investors. Comparatively, 86.5% of Allied World Assurance shares are owned by institutional investors. 18.1% of Essent Group shares are owned by company insiders. Comparatively, 3.2% of Allied World Assurance shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Essent Group and Allied World Assurance’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Essent Group $458.26 million 9.53 $222.60 million $2.98 14.89
Allied World Assurance N/A N/A N/A $2.97 17.36

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

Analyst Ratings

This is a summary of recent ratings for Essent Group and Allied World Assurance, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Essent Group 0 2 7 0 2.78
Allied World Assurance 0 2 0 0 2.00

Essent Group currently has a consensus price target of $47.89, suggesting a potential upside of 7.91%. Allied World Assurance has a consensus price target of $24.50, suggesting a potential downside of 52.47%. Given Essent Group’s stronger consensus rating and higher possible upside, equities analysts clearly believe Essent Group is more favorable than Allied World Assurance.

Profitability

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

Net Margins Return on Equity Return on Assets
Essent Group 51.64% 18.55% 13.15%
Allied World Assurance 12.56% 8.96% 2.42%

Risk & Volatility

Essent Group has a beta of 1.15, indicating that its stock price is 15% more volatile than the S&P 500. Comparatively, Allied World Assurance has a beta of 0.7, indicating that its stock price is 30% less volatile than the S&P 500.

Dividends

Allied World Assurance pays an annual dividend of $0.52 per share and has a dividend yield of 1.0%. Essent Group does not pay a dividend. Allied World Assurance pays out 17.5% of its earnings in the form of a dividend.

Summary

Essent Group beats Allied World Assurance on 11 of the 14 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 Allied World Assurance

Allied World Assurance Company Holdings Ltd is a Germany-based holding company. It provides property, casualty and specialty insurance and reinsurance solutions to clients around the world. The Company operates in three segments: North American Insurance, Global Markets Insurance and Reinsurance. The North American Insurance segment consists of the Company’s direct insurance operations in the United States, Bermuda and Canada. The Global Markets Insurance segment includes all of the Company’s direct insurance operations outside of North America. The Company’s reinsurance segment includes the reinsurance of property, general casualty, professional liability, specialty lines and property catastrophe coverage’s written by other reinsurance companies. The Company leases space in Australia, Bermuda, Canada, Hong Kong, Ireland, Labuan, Singapore, the United Kingdom and the United States for the operation of its North American Insurance, Global Markets Insurance and Reinsurance segments.

Receive News & Ratings for Essent Group Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Essent Group and related companies with MarketBeat.com's FREE daily email newsletter.

Leave a Reply