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1. Company Snapshot

1.a. Company Description

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.


It serves the originators of residential mortgage loans, such as regulated depository institutions, mortgage banks, credit unions, and other lenders.The company was founded in 2008 and is based in Hamilton, Bermuda.

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1.b. Last Insights on ESNT

Essent Group Ltd.'s recent performance was driven by a 4.2% increase in its quarterly dividend, marking its 14th consecutive year of dividend growth. The company also reported Q4 2024 earnings of $1.58 per share, missing estimates, but the upcoming dividend hike and its consistent dividend growth are positive indicators for investors. Additionally, the company's focus on providing mortgage insurance solutions and its efforts to expand its business presence are expected to drive growth in the future.

1.c. Company Highlights

2. Essent Group Ltd. Posts Steady Q3 Earnings Amid Strong Mortgage Insurance Performance

Essent Group Ltd. reported net income of $164 million for the third quarter of 2025, a decline from $176 million in the same period last year, with diluted earnings per share (EPS) coming in at $1.67. The actual EPS was slightly lower than the estimated $1.75, but still reflected the company's solid performance. The U.S. Mortgage Insurance in force grew 2% year-over-year to $249 billion, driven by a strong credit profile with a weighted average FICO score of 746 and a weighted average original loan-to-value (LTV) ratio of 93%. The company's revenue growth is expected to be around 1.8% next year, according to analyst estimates.

Publication Date: Nov -08

📋 Highlights
  • Net Income Decline, EPS Growth: Net income fell to $164M (vs. $176M YoY), but diluted EPS rose to $1.67.
  • Mortgage Insurance In Force Growth: U.S. MI in force reached $249B, up 2% YoY, with strong credit metrics (FICO 746, LTV 93%).
  • Balance Sheet Strength: Consolidated cash and investments totaled $6.6B, with 3.9% annualized investment yield and $854M 12-month operating cash flow.
  • Capital Returns: Repurchased 9M shares for $500M YTD and announced a $500M share buyback authorization through 2027.

Financial Performance Highlights

The company's financial performance was characterized by a strong balance sheet and liquidity position, with consolidated cash and investments totaling $6.6 billion and an annualized investment yield of 3.9%. The 12-month operating cash flow stood at $854 million, supporting the company's capital return initiatives, including the repurchase of nearly 9 million shares for over $500 million year-to-date. The company also announced a common dividend of $0.31 for the fourth quarter of 2025 and a new $500 million share repurchase authorization through year-end 2027.

Valuation and Return Metrics

With a Price-to-Book (P/B) Ratio of 1.07, Essent Group Ltd.'s valuation appears reasonable, considering its strong credit quality and stable financial performance. The company's Return on Equity (ROE) stood at 12.4%, indicating a decent return on shareholders' equity. The Dividend Yield is around 1.98%, providing a relatively stable income stream for investors. The company's Net Debt / EBITDA ratio is negative, at -0.11, highlighting its strong liquidity position.

Business Outlook and Credit Quality

According to Mark Casale, Chairman and CEO, the company's mortgage insurance business remains exceptional, with credit quality at its best since inception. Casale attributed this to the quality control improvements and stringent credit guardrails put in place by the GSEs, noting that 65% of their borrowers are first-time homeowners who benefit from affordable mortgage insurance. The company's credit engine is not reliant on FICO scores, making it credit-score agnostic. As Casale stated, "the business is exceptional, with credit quality at its best since the company's inception."

Growth Prospects and Capital Management

Essent Group Ltd. is well-capitalized and expects to withstand market fluctuations, making the investment a good asset at present. The company plans to continue upstreaming capital from the MI subsidiary to U.S. Holdings, with a potential larger dividend in the fourth quarter. Casale noted that if they grow the business by 10-12% annually, book value per share could reach $85-$90 in 4-5 years, indicating a promising growth trajectory.

3. NewsRoom

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Envestnet Asset Management Inc. Cuts Position in Essent Group Ltd. $ESNT

Nov -17

Source: defenseworld.net

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Aviva PLC Reduces Stock Holdings in Essent Group Ltd. $ESNT

Nov -14

Source: defenseworld.net

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Essent Group Ltd. (ESNT) Q3 2025 Earnings Call Transcript

Nov -07

Source: seekingalpha.com

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Essent Group (ESNT) Q3 Earnings Lag Estimates

Nov -07

Source: zacks.com

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Essent Group Ltd. Announces Third Quarter 2025 Results and Declares Quarterly Dividend

Nov -07

Source: globenewswire.com

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Essent Group Ltd. $ESNT Shares Sold by Teacher Retirement System of Texas

Nov -05

Source: defenseworld.net

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Essent Group Ltd. Schedules Third Quarter Earnings Conference Call for November 7, 2025

Oct -17

Source: businesswire.com

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ESNT or BRK.B: Which Is the Better Value Stock Right Now?

Oct -13

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.00%)

6. Segments

Private Mortgage Insurance

Expected Growth: 8%

Essent Group Ltd.'s 8% growth in Private Mortgage Insurance is driven by increasing demand for mortgage insurance, low unemployment rates, and rising housing prices. Additionally, the company's strong risk-based pricing and underwriting practices, as well as its expanding lender partnerships, contribute to its growth momentum.

7. Detailed Products

Mortgage Insurance

Essent Group Ltd. offers mortgage insurance to lenders and investors, providing protection against defaults on residential mortgage loans.

Risk Management Services

Essent provides risk management services to lenders, including credit risk assessment, loan-level risk analysis, and portfolio risk management.

Portfolio Insurance

Essent offers portfolio insurance to investors, providing protection against losses on a portfolio of mortgage-backed securities.

Reinsurance

Essent provides reinsurance to other mortgage insurers, helping them to manage their risk exposure and improve their capital efficiency.

8. Essent Group Ltd.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Essent Group Ltd. is medium due to the presence of alternative insurance providers in the market.

Bargaining Power Of Customers

The bargaining power of customers is low for Essent Group Ltd. as customers have limited negotiating power in the insurance industry.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium for Essent Group Ltd. as the company relies on a network of independent agents and brokers to distribute its products.

Threat Of New Entrants

The threat of new entrants is low for Essent Group Ltd. due to the high barriers to entry in the insurance industry, including regulatory hurdles and capital requirements.

Intensity Of Rivalry

The intensity of rivalry is high for Essent Group Ltd. due to the competitive nature of the insurance industry, with many established players vying for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 7.73%
Debt Cost 7.74%
Equity Weight 92.27%
Equity Cost 9.19%
WACC 9.08%
Leverage 8.37%

11. Quality Control: Essent Group Ltd. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
MGIC

A-Score: 6.7/10

Value: 6.0

Growth: 6.6

Quality: 8.4

Yield: 4.0

Momentum: 6.0

Volatility: 9.3

1-Year Total Return ->

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Stock-Card
Essent Group

A-Score: 6.7/10

Value: 6.7

Growth: 6.3

Quality: 9.0

Yield: 4.0

Momentum: 4.5

Volatility: 9.7

1-Year Total Return ->

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Assurant

A-Score: 6.6/10

Value: 6.2

Growth: 6.4

Quality: 6.8

Yield: 4.0

Momentum: 7.5

Volatility: 8.3

1-Year Total Return ->

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Stock-Card
Assured Guaranty

A-Score: 6.4/10

Value: 6.3

Growth: 5.8

Quality: 7.8

Yield: 4.0

Momentum: 5.0

Volatility: 9.3

1-Year Total Return ->

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Stock-Card
Radian Group

A-Score: 6.1/10

Value: 6.7

Growth: 2.9

Quality: 6.8

Yield: 6.0

Momentum: 5.5

Volatility: 9.0

1-Year Total Return ->

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Stock-Card
NMI Holdings

A-Score: 6.0/10

Value: 6.8

Growth: 7.7

Quality: 9.1

Yield: 0.0

Momentum: 3.5

Volatility: 9.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

61.85$

Current Price

61.85$

Potential

-0.00%

Expected Cash-Flows