Head-To-Head Analysis: Essent Group (NYSE:ESNT) and Kinsale Capital Group (NYSE:KNSL)

Essent Group (NYSE:ESNT) and Kinsale Capital Group (NYSE:KNSL) are both mid-cap finance companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, dividends, earnings, profitability, analyst recommendations, valuation and risk.

Valuation and Earnings

This table compares Essent Group and Kinsale Capital Group”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Essent Group	$1.26 billion	4.41	$689.97 million	$7.02	8.60
Kinsale Capital Group	$1.87 billion	3.83	$503.61 million	$22.72	13.70

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

Dividends

Essent Group pays an annual dividend of $1.40 per share and has a dividend yield of 2.3%. Kinsale Capital Group pays an annual dividend of $1.00 per share and has a dividend yield of 0.3%. Essent Group pays out 19.9% of its earnings in the form of a dividend. Kinsale Capital Group pays out 4.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Essent Group has increased its dividend for 6 consecutive years and Kinsale Capital Group has increased its dividend for 2 consecutive years. Essent Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Essent Group	53.64%	12.01%	9.28%
Kinsale Capital Group	27.48%	25.82%	8.20%

Institutional & Insider Ownership

93.0% of Essent Group shares are owned by institutional investors. Comparatively, 85.4% of Kinsale Capital Group shares are owned by institutional investors. 3.6% of Essent Group shares are owned by insiders. Comparatively, 5.6% of Kinsale Capital 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 & Risk

Essent Group has a beta of 0.81, indicating that its stock price is 19% less volatile than the S&P 500. Comparatively, Kinsale Capital Group has a beta of 0.95, indicating that its stock price is 5% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Essent Group and Kinsale Capital Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Essent Group	0	6	4	0	2.40
Kinsale Capital Group	2	8	2	0	2.00

Essent Group presently has a consensus price target of $68.00, indicating a potential upside of 12.67%. Kinsale Capital Group has a consensus price target of $392.00, indicating a potential upside of 25.90%. Given Kinsale Capital Group’s higher probable upside, analysts clearly believe Kinsale Capital Group is more favorable than Essent Group.

Summary

Essent Group beats Kinsale Capital Group on 9 of the 17 factors compared between the two stocks.

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.

About Kinsale Capital Group

Kinsale Capital Group, Inc., a specialty insurance company, engages in the provision of property and casualty insurance products in the United States. The company’s commercial lines offerings include commercial property, small business casualty and property, excess and general casualty, construction, allied health, life sciences, entertainment, energy, environmental, excess professional, health care, public entity, commercial auto, inland marine, aviation, ocean marine, product recall, and railroad, as well as product, professional, and management liability insurance. It markets and sells its insurance products in all 50 states, the District of Columbia, the Commonwealth of Puerto Rico, and the U.S. Virgin Islands primarily through a network of independent insurance brokers. The company was founded in 2009 and is headquartered in Richmond, Virginia.