ESSENT GROUP LTD (ESNT) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:ESNT - BMG3198U1027 - Common Stock
62.12 USD
+1.22 (+2%)
62.12 USD
0 (0%)
ESNT gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 97 industry peers in the Financial Services industry. Both the health and profitability get an excellent rating, making ESNT a very profitable company, without any liquidiy or solvency issues. ESNT has a bad growth rate and is valued cheaply. These ratings could make ESNT a good candidate for value investing.
1. Profitability
1.1 Basic Checks
- ESNT had positive earnings in the past year.
- In the past year ESNT had a positive cash flow from operations.
- ESNT had positive earnings in each of the past 5 years.
- Each year in the past 5 years ESNT had a positive operating cash flow.
1.2 Ratios
- ESNT has a Return On Assets of 9.56%. This is amongst the best in the industry. ESNT outperforms 87.63% of its industry peers.
- ESNT's Return On Equity of 12.25% is fine compared to the rest of the industry. ESNT outperforms 65.98% of its industry peers.
- ESNT has a better Return On Invested Capital (10.25%) than 82.47% of its industry peers.
- ESNT had an Average Return On Invested Capital over the past 3 years of 12.56%. This is above the industry average of 8.46%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.56% | ||
| ROE | 12.25% | ||
| ROIC | 10.25% |
ROA(3y)11.87%
ROA(5y)11.09%
ROE(3y)15.1%
ROE(5y)14.42%
ROIC(3y)12.56%
ROIC(5y)11.7%
1.3 Margins
- ESNT has a Profit Margin of 55.63%. This is amongst the best in the industry. ESNT outperforms 94.85% of its industry peers.
- ESNT's Profit Margin has declined in the last couple of years.
- ESNT's Operating Margin of 68.46% is amongst the best of the industry. ESNT outperforms 92.78% of its industry peers.
- In the last couple of years the Operating Margin of ESNT has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 68.46% | ||
| PM (TTM) | 55.63% | ||
| GM | N/A |
OM growth 3Y-3.9%
OM growth 5Y-1.46%
PM growth 3Y-3.98%
PM growth 5Y-1.73%
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), ESNT is creating some value.
- ESNT has less shares outstanding than it did 1 year ago.
- The number of shares outstanding for ESNT has been increased compared to 5 years ago.
- The debt/assets ratio for ESNT is higher compared to a year ago.
2.2 Solvency
- An Altman-Z score of 3.82 indicates that ESNT is not in any danger for bankruptcy at the moment.
- Looking at the Altman-Z score, with a value of 3.82, ESNT belongs to the top of the industry, outperforming 85.57% of the companies in the same industry.
- The Debt to FCF ratio of ESNT is 0.59, which is an excellent value as it means it would take ESNT, only 0.59 years of fcf income to pay off all of its debts.
- With an excellent Debt to FCF ratio value of 0.59, ESNT belongs to the best of the industry, outperforming 83.51% of the companies in the same industry.
- ESNT has a Debt/Equity ratio of 0.09. This is a healthy value indicating a solid balance between debt and equity.
- ESNT has a better Debt to Equity ratio (0.09) than 75.26% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.09 | ||
| Debt/FCF | 0.59 | ||
| Altman-Z | 3.82 |
ROIC/WACC1.21
WACC8.48%
2.3 Liquidity
- A Current Ratio of 2.63 indicates that ESNT has no problem at all paying its short term obligations.
- ESNT has a better Current ratio (2.63) than 81.44% of its industry peers.
- ESNT has a Quick Ratio of 2.63. This indicates that ESNT is financially healthy and has no problem in meeting its short term obligations.
- The Quick ratio of ESNT (2.63) is better than 83.51% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.63 | ||
| Quick Ratio | 2.63 |
3. Growth
3.1 Past
- ESNT shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -0.43%.
- ESNT shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 3.90% yearly.
- The Revenue has been growing slightly by 3.13% in the past year.
- The Revenue has been growing slightly by 7.45% on average over the past years.
EPS 1Y (TTM)-0.43%
EPS 3Y3.83%
EPS 5Y3.9%
EPS Q2Q%1.21%
Revenue 1Y (TTM)3.13%
Revenue growth 3Y6.52%
Revenue growth 5Y7.45%
Sales Q2Q%-1.5%
3.2 Future
- ESNT is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 5.17% yearly.
- Based on estimates for the next years, ESNT will show a small growth in Revenue. The Revenue will grow by 1.83% on average per year.
EPS Next Y4.23%
EPS Next 2Y4.34%
EPS Next 3Y5.17%
EPS Next 5YN/A
Revenue Next Year1.5%
Revenue Next 2Y1.18%
Revenue Next 3Y1.83%
Revenue Next 5YN/A
3.3 Evolution
- The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
- ESNT is valuated reasonably with a Price/Earnings ratio of 9.04.
- ESNT's Price/Earnings ratio is a bit cheaper when compared to the industry. ESNT is cheaper than 69.07% of the companies in the same industry.
- ESNT's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.25.
- With a Price/Forward Earnings ratio of 8.34, the valuation of ESNT can be described as very reasonable.
- 65.98% of the companies in the same industry are more expensive than ESNT, based on the Price/Forward Earnings ratio.
- When comparing the Price/Forward Earnings ratio of ESNT to the average of the S&P500 Index (25.98), we can say ESNT is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.04 | ||
| Fwd PE | 8.34 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ESNT indicates a rather cheap valuation: ESNT is cheaper than 80.41% of the companies listed in the same industry.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of ESNT indicates a rather cheap valuation: ESNT is cheaper than 87.63% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 7.18 | ||
| EV/EBITDA | 7.36 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates ESNT does not grow enough to justify the current Price/Earnings ratio.
- The decent profitability rating of ESNT may justify a higher PE ratio.
PEG (NY)2.14
PEG (5Y)2.32
EPS Next 2Y4.34%
EPS Next 3Y5.17%
5. Dividend
5.1 Amount
- ESNT has a Yearly Dividend Yield of 1.99%. Purely for dividend investing, there may be better candidates out there.
- ESNT's Dividend Yield is a higher than the industry average which is at 2.09.
- ESNT's Dividend Yield is comparable with the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.99% |
5.2 History
- On average, the dividend of ESNT grows each year by 30.20%, which is quite nice.
- ESNT has been paying a dividend for over 5 years, so it has already some track record.
- ESNT has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
Dividend Growth(5Y)30.2%
Div Incr Years5
Div Non Decr Years5
5.3 Sustainability
- ESNT pays out 17.35% of its income as dividend. This is a sustainable payout ratio.
- The dividend of ESNT is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP17.35%
EPS Next 2Y4.34%
EPS Next 3Y5.17%
ESSENT GROUP LTD / ESNT FAQ
What is the ChartMill fundamental rating of ESSENT GROUP LTD (ESNT) stock?
ChartMill assigns a fundamental rating of 6 / 10 to ESNT.
Can you provide the valuation status for ESSENT GROUP LTD?
ChartMill assigns a valuation rating of 7 / 10 to ESSENT GROUP LTD (ESNT). This can be considered as Undervalued.
What is the profitability of ESNT stock?
ESSENT GROUP LTD (ESNT) has a profitability rating of 7 / 10.
What are the PE and PB ratios of ESSENT GROUP LTD (ESNT) stock?
The Price/Earnings (PE) ratio for ESSENT GROUP LTD (ESNT) is 9.04 and the Price/Book (PB) ratio is 1.05.
Is the dividend of ESSENT GROUP LTD sustainable?
The dividend rating of ESSENT GROUP LTD (ESNT) is 5 / 10 and the dividend payout ratio is 17.35%.