Contrasting NMI (NASDAQ:NMIH) and Daiwa Securities Group (OTCMKTS:DSEEY)

Daiwa Securities Group (OTCMKTS:DSEEY) and NMI (NASDAQ:NMIH) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitability, institutional ownership, valuation, earnings, dividends, risk and analyst recommendations.

Volatility and Risk

Daiwa Securities Group has a beta of 0.59, indicating that its stock price is 41% less volatile than the S&P 500. Comparatively, NMI has a beta of 0.52, indicating that its stock price is 48% less volatile than the S&P 500.

Insider & Institutional Ownership

94.1% of NMI shares are owned by institutional investors. 2.4% of NMI shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Daiwa Securities Group and NMI”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Daiwa Securities Group	$9.75 billion	1.52	$1.16 billion	$0.93	11.30
NMI	$706.44 million	4.16	$388.93 million	$5.08	7.68

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

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Daiwa Securities Group and NMI, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Daiwa Securities Group	0	1	0	0	2.00
NMI	0	3	5	0	2.62

NMI has a consensus price target of $47.75, suggesting a potential upside of 22.34%. Given NMI’s stronger consensus rating and higher possible upside, analysts plainly believe NMI is more favorable than Daiwa Securities Group.

Profitability

This table compares Daiwa Securities Group and NMI’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Daiwa Securities Group	12.51%	9.31%	0.49%
NMI	54.10%	15.13%	10.21%

Summary

NMI beats Daiwa Securities Group on 10 of the 14 factors compared between the two stocks.

About Daiwa Securities Group

Daiwa Securities Group Inc., together with its subsidiaries, primarily operates as a securities broker-dealer in Japan and internationally. The company operates through four segments: Retail, Wholesale, Asset Management, and Investment. The Retail segment offers products and services related to asset management, including equities, bonds, investment trusts, wrap account services, insurance, banking services, inheritance-related services, etc. for individual investors and unlisted companies. The Wholesale segment offers sales and trading services of equities and bonds, as well as of foreign exchange and derivative products primarily for institutional investors and corporations; and investment banking services, such as underwriting of securities, M&A advisory, etc. The Asset Management segment structures and manages investment trusts primarily for individual investors and financial institutions; provides investment advisory services; and manages assets. The Investment segment invests in monetary claims, loans, private equities, and real estate properties, as well as energy, infrastructure, and resource sectors. The company also offers research and consulting, and information services, as well as engages in the office work activities. In addition, it is involved in the securities-related, investment advisory and agency, and investment management businesses, as well as lending and borrowing of real estate properties. The company was formerly known as Daiwa Securities Co. Ltd. and changed its name to Daiwa Securities Group Inc. in 1999. Daiwa Securities Group Inc. was founded in 1902 and is headquartered in Tokyo, Japan.

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.