Essent Group Offers Mortgage Insurance to Reduce Loan-to-Value Ratios Despite COVID-19 and Low Multiple
January 11, 2023
Trending News ☀️
Essent Group Intrinsic Value – Essent Group ($NYSE:ESNT) is a private mortgage insurer that offers insurance to reduce Loan-to-Value (LTV) ratios for borrowers who are unable to meet the standards set by GSEs or most lenders. The FICO scores of these customers are typically high, and reserves have decreased since the outbreak of COVID-19. Despite this, macro indicators remain positive for Essent. The greatest risk for the company lies in potential mortgage defaults, which are currently at historically minimal levels. Essent is well positioned to take advantage of the low loan-to-value ratios that lenders are now requiring. This allows lenders to reduce the amount of risk they take on when they provide loans to borrowers with lower credit ratings.
In addition, Essent also provides risk management solutions such as credit monitoring and fraud protection. The company has a strong track record of protecting lenders from losses due to high loan-to-value ratios. Despite the current economic uncertainty brought on by the pandemic, Essent is well capitalized and remains stable. Their stock has remained at a very low multiple, but their financial performance remains strong. They have been able to maintain their dividend and their stock price has remained relatively steady. The company remains well capitalized and their stock price remains stable despite the current economic uncertainty brought on by COVID-19. As such, Essent is an attractive option for investors looking for an insurance provider that is reliable and able to protect them against losses in the event of mortgage default.
Share Price
The news coverage regarding the mortgage industry has mostly been negative due to the COVID-19 pandemic, however, Essent Group has remained resilient. On Tuesday, the company’s stock opened at $38.1 and closed at $39.1, up by 2.0% from the prior closing price of 38.3. This means that lenders are able to reduce the amount of risk they take on when it comes to mortgage loans. Despite this, the company’s stock has still managed to remain relatively stable. Essent Group has also been able to capitalize on their market share and increase their customer base by offering competitive rates and flexible payment plans.
This has allowed them to remain competitive despite the current economic situation. Furthermore, the company has taken steps to ensure that their customers are provided with the highest level of customer service and that their mortgage insurance policies are competitively priced. Essent Group’s strategy of reducing loan-to-value ratios, offering competitive rates and flexible payment plans, and providing top notch customer service has allowed them to remain resilient despite the current economic climate and low stock multiple. This is a testament to their ability to continue to provide their customers with the best possible services and products in spite of the difficult times. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Essent Group. More…
| Total Revenues | Net Income | Net Margin |
| 976.43 | 864.97 | 88.6% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Essent Group. More…
| Operations | Investing | Financing |
| 613.36 | -583.17 | -147.43 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Essent Group. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 5.56k | 1.26k | 39.87 |
Key Ratios Snapshot
Some of the financial key ratios for Essent Group are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 5.5% | – | 106.9% |
| FCF Margin | ROE | ROA |
| 62.5% | 15.2% | 11.7% |
VI Analysis – Essent Group Intrinsic Value Calculator
ESSENT GROUP is a company whose fundamentals reflect its long-term potential. An analysis of the company using the Valuation Insight (VI) app reveals an intrinsic value of $43.2 per share. Currently, the stock is trading at $39.1, which makes it a fair price but slightly undervalued by 10%. This could be a good opportunity to invest in the company and benefit from its potential. The VI app enables users to easily assess the value of a company by providing detailed financial information and comparative analysis. The intrinsic value, calculated by the VI Line, takes into account the company’s current and projected performance, as well as its competitive position in the market. It also considers the company’s capital structure and the risks associated with investing in it. The fact that ESSENT GROUP is currently trading at a 10% discount to its intrinsic value is an indication that investors may be underestimating its long-term potential. This could be a good opportunity for investors to buy the stock at a bargain price and benefit from any potential upside in the future. Overall, ESSENT GROUP is a company that has strong fundamentals and is currently trading at a discount to its intrinsic value. This could be a good opportunity for investors to benefit from any potential upside in the future. More…
VI Peers
The Company along with its subsidiaries provides private mortgage insurance and reinsurance for mortgage lenders throughout the United States. NMI Holdings Inc, Enact Holdings Inc, Tiptree Inc are some of its competitors.
– NMI Holdings Inc ($NASDAQ:NMIH)
NMI Holdings Inc is a provider of private mortgage insurance in the United States. The company has a market cap of 1.76B and a ROE of 18.87%. NMI Holdings Inc offers mortgage insurance on loans made by private lenders, such as banks and credit unions, to borrowers with low down payments. The company was founded in 2011 and is headquartered in Walnut Creek, California.
– Enact Holdings Inc ($NASDAQ:ACT)
Enact Holdings Inc is a publicly traded holding company with a focus on investments in technology and healthcare companies. The company has a market cap of 3.96B as of 2022 and a return on equity of 17.23%. Enact Holdings Inc invests in companies that are engaged in the development, commercialization, and marketing of innovative products and services. The company’s portfolio includes companies such as Aptinyx, Inc., a clinical-stage biopharmaceutical company developing treatments for central nervous system disorders; and BridgeBio Pharma, Inc., a clinical-stage biopharmaceutical company developing treatments for genetic diseases.
– Tiptree Inc ($NASDAQ:TIPT)
Tiptree Inc. is a holding company that engages in the insurance businesses. It operates through the following segments: Life and Health, Property and Casualty, and Other. The Life and Health segment offers life insurance, annuities, and long-term care insurance. The Property and Casualty segment provides commercial and personal lines of property and casualty insurance. The Other segment includes investment management and advisory services. The company was founded by George H. Tipton and Harry B. Tipton in 1885 and is headquartered in New York, NY.
Summary
Essent Group is a private mortgage insurer that offers loan-to-value (LTV) ratio reductions to help mitigate risk for investors amid the current COVID-19 pandemic and low multiples. Recent news coverage has largely focused on the negative impacts of the pandemic, but Essent Group continues to offer attractive opportunities for investors. The company provides mortgage insurance products that allow lenders to make more home loans available to borrowers with lower down payments, while protecting investors from potential losses caused by borrower default. For investors, this means that they can benefit from the low interest rates and low LTV ratios offered by Essent Group, while also reducing their exposure to potential losses.
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