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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's Strong 2025 Performance Driven by Positive Credit Trends

Essent Group reported net income of $155 million or $1.60 per diluted share for the fourth quarter, and $690 million or $6.90 per diluted share for the full year 2025, with a return on average equity of 12%. The actual EPS came in lower than estimates of $1.74. The company's mortgage insurance in force was $248 billion, a 2% increase from a year ago. The book value per share increased by 13% to $60.31 as of December 31. The company's PMIERs efficiency ratio was strong at 169% with $1.4 billion in excess available assets.

Publication Date: Feb -15

📋 Highlights
  • Strong 2025 Financial Performance: Net income of $690M ($6.90/share) and ROE of 12% for the year, with book value per share rising 13% to $60.31.
  • Fourth Quarter Earnings Highlight: $155M net income ($1.60/share) and $1.4B in PMIERs excess assets, reflecting robust liquidity and regulatory strength.
  • Mortgage Insurance Growth: In-force portfolio of $248B (+2% YoY), 86% persistency, and 60% of loans at 6% or lower note rates, underscoring credit quality.
  • Lloyd’s Market Expansion: $50M initial investment to expand Essent Re into Lloyd’s, leveraging its $1.7B balance sheet and A-rated capital efficiency.
  • Disciplined Shareholder Returns: 10% share buyback completed in 2025, with plans to continue repurchases, prioritizing capital returns over low-premium risk investments.

Valuation Metrics

With a Price-to-Book Ratio (P/B) of 1.07, the company's stock is trading slightly above its book value. The Dividend Yield is 2.02%, indicating a relatively stable return for investors. The Return on Equity (ROE) is 12.32%, demonstrating the company's ability to generate profits from shareholders' equity.

Business Outlook

Essent Group's management expects insurance in force growth to remain modest, around 1.9% year-over-year, due to affordability and supply issues. However, Mark Casale believes that housing will continue to grow, and when it does, it will be a significant spike. The company's cautious outlook is driven by a focus on optimizing unit economics and taking advantage of its liquidity advantage with Essent Re.

Expansion into Lloyd's Market

The company's decision to enter the Lloyd's market is a measured approach to explore new opportunities, with an initial investment of $50 million. Essent Re has a valuable asset with a balance sheet of $1.7 billion, single-A rating, and a strong team with actuarial backgrounds. This expansion is not a new business but rather an extension of its existing operations.

Revenue Growth Expectations

Analysts estimate next year's revenue growth at 3.2%. With the company's strong financial performance in 2025, Essent Group is well-positioned to create long-term shareholder value. The company's disciplined strategy serves the best interest of its stakeholders, and its return of capital to shareholders is a strategic decision.

3. NewsRoom

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Essent Group Ltd. (ESNT) Q4 2025 Earnings Call Transcript

Feb -13

Source: seekingalpha.com

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Essent Group (ESNT) Q4 Earnings Miss Estimates

Feb -13

Source: zacks.com

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Essent Group Ltd. Announces Fourth Quarter & Full Year 2025 Results and Increases Quarterly Dividend

Feb -13

Source: globenewswire.com

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Cooke & Bieler LP Grows Stock Position in Essent Group Ltd. $ESNT

Jan -26

Source: defenseworld.net

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Essent Group Ltd. Schedules Fourth Quarter Earnings Conference Call for February 13, 2026

Jan -23

Source: globenewswire.com

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Essent Group Ltd. $ESNT Shares Purchased by Arrowstreet Capital Limited Partnership

Dec -08

Source: defenseworld.net

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Edgestream Partners L.P. Sells 62,383 Shares of Essent Group Ltd. $ESNT

Dec -05

Source: defenseworld.net

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

Nov -17

Source: defenseworld.net

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

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MGIC

A-Score: 6.9/10

Value: 6.7

Growth: 6.4

Quality: 8.2

Yield: 4.0

Momentum: 7.0

Volatility: 9.3

1-Year Total Return ->

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Essent Group

A-Score: 6.8/10

Value: 6.9

Growth: 6.3

Quality: 6.7

Yield: 4.0

Momentum: 7.0

Volatility: 9.7

1-Year Total Return ->

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Radian Group

A-Score: 6.3/10

Value: 6.0

Growth: 2.9

Quality: 8.1

Yield: 6.0

Momentum: 5.5

Volatility: 9.0

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Assured Guaranty

A-Score: 6.2/10

Value: 5.7

Growth: 5.7

Quality: 7.3

Yield: 4.0

Momentum: 5.5

Volatility: 9.3

1-Year Total Return ->

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NMI Holdings

A-Score: 6.2/10

Value: 6.9

Growth: 7.6

Quality: 9.0

Yield: 0.0

Momentum: 4.5

Volatility: 9.0

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Assurant

A-Score: 6.1/10

Value: 6.1

Growth: 6.1

Quality: 6.3

Yield: 4.0

Momentum: 6.0

Volatility: 8.3

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

61.42$

Current Price

61.42$

Potential

-0.00%

Expected Cash-Flows