Reviewing NMI (NASDAQ:NMIH) and Block (NYSE:XYZ)

Block (NYSE:XYZ) and NMI (NASDAQ:NMIH) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their risk, profitability, earnings, dividends, institutional ownership, analyst recommendations and valuation.

Analyst Ratings

This is a breakdown of recent ratings for Block and NMI, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Block	0	8	29	3	2.88
NMI	0	2	4	0	2.67

Block currently has a consensus price target of $95.84, suggesting a potential upside of 12.25%. NMI has a consensus price target of $48.33, suggesting a potential upside of 7.77%. Given Block’s stronger consensus rating and higher possible upside, research analysts plainly believe Block is more favorable than NMI.

Profitability

This table compares Block and NMI’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Block	1.43%	8.10%	4.53%
NMI	54.10%	15.13%	10.21%

Earnings & Valuation

This table compares Block and NMI”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Block	$25.04 billion	2.05	$1.31 billion	$0.56	152.47
NMI	$730.78 million	4.62	$388.93 million	$5.08	8.83

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

Volatility and Risk

Block has a beta of 2.53, meaning that its share price is 153% more volatile than the S&P 500. Comparatively, NMI has a beta of 0.54, meaning that its share price is 46% less volatile than the S&P 500.

Insider and Institutional Ownership

70.4% of Block shares are owned by institutional investors. Comparatively, 94.1% of NMI shares are owned by institutional investors. 11.4% of Block shares are owned by company insiders. Comparatively, 2.4% of NMI shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Block beats NMI on 9 of the 15 factors compared between the two stocks.

About Block

Square, Inc. provides payment and point-of-sale solutions in the United States and internationally. The company's commerce ecosystem includes point-of-sale software and hardware that enables sellers to turn mobile and computing devices into payment and point-of-sale solutions. It offers hardware products, including Magstripe reader, which enables swiped transactions of magnetic stripe cards; Contactless and chip reader that accepts EMV® chip cards and Near Field Communication payments; Chip card reader, which accepts EMV® chip cards and enables swiped transactions of magnetic stripe cards; Square Stand, which enables an iPad to be used as a payment terminal or full point of sale solution; and Square Register that combines its hardware, point-of-sale software, and payments technology, as well as managed payments solutions. The company also provides Square Point of Sale software; Cash App, which provides access to the financial system, allowing customers to electronically send, store, and spend money; Caviar, a food ordering platform for restaurants to offer food ordering, pickup and delivery, to their customers; and Square Capital that facilitates loans to sellers based on real-time payment and point-of-sale data. Square, Inc. was founded in 2009 and is headquartered in San Francisco, California.

About NMI

NMI Holdings, Inc. provides private mortgage guaranty insurance services in the United States. The company offers mortgage insurance services, such as primary and pool insurance; and outsourced loan review services to mortgage loan originators. It serves national and regional mortgage banks, money center banks, credit unions, community banks, builder-owned mortgage lenders, internet-sourced lenders, and other non-bank lenders. The company was incorporated in 2011 and is headquartered in Emeryville, California.