Essent Group Ltd. (ESNT) stock analysis

P/E above its 5-year median

Essent's P/E of 8.9 is above its own 5-year median of 8.2.

P/E below the industry

Essent's P/E of 8.9 is below the Insurance Carriers median of 11.2.

P/S above the industry

Essent's price-to-sales of 4.21 is above the Insurance Carriers median of 2.96.

P/B below the industry

Essent's price-to-book of 1.05 is below the Insurance Carriers median of 1.57.

Trading below fair value

The share price of $64.82 is below our fair value estimate of $76.41.

Margin of safety under 20%

The price is 15.2% below fair value, less than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew 8.0% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -3.7% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew -3.3% over the last twelve months, against a 5-year average of 10.8% a year.

Growing slower than the industry

Revenue grew 9.6% over the last twelve months; the Insurance Carriers median is 11.1%.

Company guidance

No outlook found in earnings releases from the last twelve months.

Gross margin trend

Banks and insurers do not report gross profit.

Return on equity under 15%

Return on equity was 12.0% over the last twelve months and averaged 15.3% over five years; we look for 15% on both.

Return on assets over 1%

Return on assets was 9.1%; for a bank or insurer, 1% or more is considered good.

Return on equity below the industry

Essent's return on equity of 12.0% is below the Insurance Carriers median of 14.0%.

Earnings grew over 5 years

Net income grew 10.8% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 49.1% over the last twelve months, against a 5-year average of 65.1%.

Net margin above the industry

Essent's net margin of 49.1% is above the Insurance Carriers median of 10.6%.

Debt level

Needs debt and equity figures.

Debt trend

Needs a balance sheet from five years ago with positive equity.

Debt coverage

Needs operating cash flow.

Interest coverage

Interest expense is not reported separately.

Short-term liquidity

Insurers do not split assets into current and non-current.

Bankruptcy risk (Altman Z)

The Altman model does not apply to insurers.

Pays a dividend

Essent paid dividends worth 1.6% of the share price over the last twelve months.

Yield below Treasuries

The 1.6% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Essent yields 1.6%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 7 fiscal years.

Covered by earnings

Dividends take 18.4% of net income.

Covered by free cash flow

Dividends take 14.6% of free cash flow.