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. ESNT scores excellent points on both the profitability and health parts. This is a solid base for a good stock. ESNT has a bad growth rate and is valued cheaply. This makes ESNT very considerable for value investing!
1. Profitability
1.1 Basic Checks
- In the past year ESNT was profitable.
- In the past year ESNT had a positive cash flow from operations.
- Each year in the past 5 years ESNT has been profitable.
- Each year in the past 5 years ESNT had a positive operating cash flow.
1.2 Ratios
- ESNT's Return On Assets of 9.56% is amongst the best of the industry. ESNT outperforms 87.63% of its industry peers.
- ESNT has a better Return On Equity (12.25%) than 65.98% of its industry peers.
- ESNT has a Return On Invested Capital of 10.25%. This is amongst the best in the industry. ESNT outperforms 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
- The Profit Margin of ESNT (55.63%) is better than 94.85% of its industry peers.
- ESNT's Profit Margin has declined in the last couple of years.
- With an excellent Operating Margin value of 68.46%, ESNT belongs to the best of the industry, outperforming 92.78% of the companies in the same industry.
- ESNT's Operating Margin has been stable in the last couple of years.
| 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
- ESNT has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
- ESNT has less shares outstanding than it did 1 year ago.
- ESNT has more shares outstanding than it did 5 years ago.
- ESNT has a worse debt/assets ratio than last year.
2.2 Solvency
- ESNT has an Altman-Z score of 3.78. This indicates that ESNT is financially healthy and has little risk of bankruptcy at the moment.
- ESNT's Altman-Z score of 3.78 is amongst the best of the industry. ESNT outperforms 85.57% of its industry peers.
- ESNT has a debt to FCF ratio of 0.59. This is a very positive value and a sign of high solvency as it would only need 0.59 years to pay back of 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.
- A Debt/Equity ratio of 0.09 indicates that ESNT is not too dependend on debt financing.
- The Debt to Equity ratio of ESNT (0.09) is better than 75.26% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.09 | ||
| Debt/FCF | 0.59 | ||
| Altman-Z | 3.78 |
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.
- Looking at the Current ratio, with a value of 2.63, ESNT belongs to the top of the industry, outperforming 81.44% of the companies in the same industry.
- 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.
- With an excellent Quick ratio value of 2.63, ESNT belongs to the best of the industry, outperforming 83.51% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.63 | ||
| Quick Ratio | 2.63 |
3. Growth
3.1 Past
- The earnings per share for ESNT have decreased by -0.43% in the last year.
- ESNT shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 3.90% yearly.
- Looking at the last year, ESNT shows a small growth in Revenue. The Revenue has grown by 3.13% in the last year.
- Measured over the past years, ESNT shows a small growth in Revenue. The Revenue has been growing by 7.45% on average per year.
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.
- ESNT is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 1.83% yearly.
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
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
- The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- A Price/Earnings ratio of 9.04 indicates a reasonable valuation of ESNT.
- ESNT's Price/Earnings ratio is a bit cheaper when compared to the industry. ESNT is cheaper than 70.10% of the companies in the same industry.
- The average S&P500 Price/Earnings ratio is at 27.25. ESNT is valued rather cheaply when compared to this.
- The Price/Forward Earnings ratio is 8.34, which indicates a very decent valuation of ESNT.
- 67.01% of the companies in the same industry are more expensive than ESNT, based on the Price/Forward Earnings ratio.
- ESNT's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 25.98.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.04 | ||
| Fwd PE | 8.34 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, ESNT is valued cheaply inside the industry as 82.47% of the companies are valued more expensively.
- Based on the Price/Free Cash Flow ratio, ESNT is valued cheaply inside the industry as 88.66% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 7.18 | ||
| EV/EBITDA | 7.23 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- 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
- With a Yearly Dividend Yield of 1.99%, ESNT has a reasonable but not impressive dividend return.
- Compared to an average industry Dividend Yield of 2.09, ESNT pays a bit more dividend than its industry peers.
- 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.
- As ESNT did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
Dividend Growth(5Y)30.2%
Div Incr Years5
Div Non Decr Years5
5.3 Sustainability
- 17.35% of the earnings are spent on dividend by ESNT. This is a low number and sustainable payout ratio.
- ESNT's earnings are growing slower than its dividend. 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%.