Contrasting Essent Group (NYSE:ESNT) and Kingsway Financial Services (NYSE:KFS)

Essent Group (NYSE:ESNT) and Kingsway Financial Services (NYSE:KFS) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, valuation, earnings, institutional ownership, analyst recommendations, risk and dividends.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Essent Group and Kingsway Financial Services, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Essent Group	0	2	5	0	2.71
Kingsway Financial Services	0	0	0	0	0.00

Essent Group currently has a consensus target price of $63.29, indicating a potential upside of 4.30%. Given Essent Group’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Essent Group is more favorable than Kingsway Financial Services.

Profitability

This table compares Essent Group and Kingsway Financial Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Essent Group	57.29%	12.98%	10.28%
Kingsway Financial Services	-3.92%	-37.05%	-2.23%

Volatility and Risk

Essent Group has a beta of 0.81, indicating that its stock price is 19% less volatile than the S&P 500. Comparatively, Kingsway Financial Services has a beta of 0.28, indicating that its stock price is 72% less volatile than the S&P 500.

Earnings and Valuation

This table compares Essent Group and Kingsway Financial Services”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Essent Group	$1.24 billion	4.95	$729.40 million	$6.83	8.88
Kingsway Financial Services	$109.38 million	3.51	-$9.27 million	N/A	N/A

Essent Group has higher revenue and earnings than Kingsway Financial Services.

Insider & Institutional Ownership

93.0% of Essent Group shares are held by institutional investors. Comparatively, 72.4% of Kingsway Financial Services shares are held by institutional investors. 2.9% of Essent Group shares are held by company insiders. Comparatively, 53.8% of Kingsway Financial Services shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

Essent Group beats Kingsway Financial Services on 11 of the 12 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 Kingsway Financial Services

Kingsway Financial Services Inc., through its subsidiaries, engages in the extended warranty and business services in the United States. The company operates through two segments, Extended Warranty and Kingsway Search Xcelerator. The Extended Warranty segment markets, sells, and administers vehicle service agreements and related products for new and used automobiles, motorcycles, and ATVs. This segment also markets and distributes warranty products to manufacturers, distributors, and installers of heating, ventilation and air conditioning, standby generator, commercial LED lighting, and commercial refrigeration equipment; and provides equipment breakdown and maintenance support services to companies, as well as after-market vehicle protection services. The Kingsway Search Xcelerator offers outsourced finance and human resources consulting services, including operational accounting, such as bookkeeping, accounting, financial reporting, and analysis and strategic finance services; technical accounting comprising initial public offerings, Securities and Exchange Commission reporting, and international consolidation services; human resources, workforce management, and compliance support services; and advisory services. This segment also provides financial executive services for project and interim staffing engagements; search services for permanent placements; healthcare staffing services to acute healthcare facilities for short-term and day-to-day needs of hospitals; software products for the management needs of all types of shared-ownership properties; and fully managed outsourced cardiac telemetry services, as well as provides mobile monitors to the hospitals. The company offers its products and services through credit unions and dealers. Kingsway Financial Services Inc. was incorporated in 1989 and is headquartered in Chicago, Illinois.