Critical Analysis: NI (NASDAQ:NODK) & Essent Group (NYSE:ESNT)

NI (NASDAQ:NODK) and Essent Group (NYSE:ESNT) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their dividends, profitability, valuation, institutional ownership, risk, earnings and analyst recommendations.

Volatility and Risk

NI has a beta of 0.37, indicating that its stock price is 63% less volatile than the S&P 500. Comparatively, Essent Group has a beta of 0.9, indicating that its stock price is 10% less volatile than the S&P 500.

Earnings & Valuation

This table compares NI and Essent Group”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NI	$325.20 million	0.88	-$6.06 million	$0.13	107.08
Essent Group	$1.24 billion	5.15	$729.40 million	$6.87	9.64

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
NI	0.87%	1.05%	0.47%
Essent Group	55.63%	12.40%	9.73%

Analyst Recommendations

This is a breakdown of current recommendations for NI and Essent Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NI	0	1	0	0	2.00
Essent Group	1	4	4	0	2.33

Essent Group has a consensus target price of $66.67, suggesting a potential upside of 0.70%. Given Essent Group’s stronger consensus rating and higher probable upside, analysts clearly believe Essent Group is more favorable than NI.

Insider and Institutional Ownership

21.9% of NI shares are owned by institutional investors. Comparatively, 93.0% of Essent Group shares are owned by institutional investors. 1.2% of NI shares are owned by company insiders. Comparatively, 3.4% of Essent Group shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

Essent Group beats NI on 13 of the 14 factors compared between the two stocks.

About NI

NI Holdings, Inc. underwrites property and casualty insurance products in the United States. Its products include private passenger auto, non-standard automobile, homeowners, farm owners, crop hail and multi-peril crop, and liability insurance policies. The company was founded in 1946 and is headquartered in Fargo, North Dakota. NI Holdings, Inc. operates as a subsidiary of Nodak Mutual Group, Inc.

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.