Reviewing Bowhead Specialty (NYSE:BOW) and Essent Group (NYSE:ESNT)

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

Analyst Ratings

This is a breakdown of current ratings and target prices for Bowhead Specialty and Essent Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bowhead Specialty	0	4	5	0	2.56
Essent Group	1	4	4	0	2.33

Bowhead Specialty presently has a consensus target price of $35.00, indicating a potential upside of 35.73%. Essent Group has a consensus target price of $65.67, indicating a potential upside of 6.57%. Given Bowhead Specialty’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Bowhead Specialty is more favorable than Essent Group.

Insider & Institutional Ownership

93.0% of Essent Group shares are owned by institutional investors. 3.4% of Essent Group shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Volatility and Risk

Bowhead Specialty has a beta of -1.07, suggesting that its stock price is 207% less volatile than the S&P 500. Comparatively, Essent Group has a beta of 0.9, suggesting that its stock price is 10% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Bowhead Specialty	10.12%	13.53%	2.91%
Essent Group	55.63%	12.40%	9.73%

Earnings and Valuation

This table compares Bowhead Specialty and Essent Group”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bowhead Specialty	$425.66 million	1.99	$38.24 million	$1.56	16.53
Essent Group	$1.24 billion	4.79	$729.40 million	$6.87	8.97

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

Summary

Essent Group beats Bowhead Specialty on 9 of the 14 factors compared between the two stocks.

About Bowhead Specialty

Bowhead Specialty Holdings Inc. provides specialty property and casualty insurance products in the United States. It underwrites casualty insurance solutions for risks in the construction, distribution, heavy manufacturing, real estate, and hospitality segments; professional liability insurance solutions for financial institutions, private and public directors and officers liability insurance, errors and omissions liability insurance, and cyber segments; and healthcare solutions for hospitals, senior care providers, managed care organizations, miscellaneous medical facilities, and healthcare management liability segments. The company distributes its products through distribution partners in wholesale and retail markets. Bowhead Specialty Holdings Inc. was formerly known as Bowhead Holdings Inc. and changed its name to Bowhead Specialty Holdings Inc. in March 2024. The company was founded in 2020 and is based in New York, New York. Bowhead Specialty Holdings Inc. operates as a subsidiary of Bowhead Insurance Holdings LP.

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.