Comparing Essent Group (NYSE:ESNT) & Investors Title (NASDAQ:ITIC)

Essent Group (NYSE:ESNT) and Investors Title (NASDAQ:ITIC) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, profitability, risk, earnings, analyst recommendations, dividends and valuation.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Essent Group and Investors Title, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Essent Group	1	4	4	0	2.33
Investors Title	0	0	1	0	3.00

Essent Group currently has a consensus target price of $65.67, suggesting a potential upside of 6.09%. Given Essent Group’s higher possible upside, research analysts plainly believe Essent Group is more favorable than Investors Title.

Earnings & Valuation

This table compares Essent Group and Investors Title”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Essent Group	$1.24 billion	4.81	$729.40 million	$6.87	9.01
Investors Title	$258.30 million	1.83	$31.07 million	$19.01	13.17

Essent Group has higher revenue and earnings than Investors Title. Essent Group is trading at a lower price-to-earnings ratio than Investors Title, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Essent Group and Investors Title’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Essent Group	55.63%	12.40%	9.73%
Investors Title	13.15%	13.72%	10.47%

Risk & Volatility

Essent Group has a beta of 0.9, indicating that its share price is 10% less volatile than the S&P 500. Comparatively, Investors Title has a beta of 0.62, indicating that its share price is 38% less volatile than the S&P 500.

Insider & Institutional Ownership

93.0% of Essent Group shares are owned by institutional investors. Comparatively, 41.4% of Investors Title shares are owned by institutional investors. 2.9% of Essent Group shares are owned by company insiders. Comparatively, 26.4% of Investors Title shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

Essent Group pays an annual dividend of $1.24 per share and has a dividend yield of 2.0%. Investors Title pays an annual dividend of $1.84 per share and has a dividend yield of 0.7%. Essent Group pays out 18.0% of its earnings in the form of a dividend. Investors Title pays out 9.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Essent Group has increased its dividend for 6 consecutive years. Essent Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Essent Group beats Investors Title on 10 of the 17 factors compared between the two stocks.

About Essent Group

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, as well as risk management products and title insurance and settlement services. It serves the originators of residential mortgage loans, such as regulated depository institutions, mortgage banks, credit unions, and other lenders. Essent Group Ltd. was incorporated in 2008 and is based in Hamilton, Bermuda.

About Investors Title

Investors Title Company engages in the issuance of residential and commercial title insurance for residential, institutional, commercial, and industrial properties. The company underwrites land title insurance for owners and mortgagees as a primary insurer; and assumes the reinsurance of title insurance risks from other title insurance companies. It offers services in connection with tax-deferred exchanges of like-kind property; acts as a qualified intermediary in tax-deferred exchanges of property; coordinates the exchange aspects of the real estate transaction, such as drafting standard exchange documents, holding the exchange funds between the sale of the old property and the purchase of the new property, and accepting the formal identification of the replacement property. In addition, it serves as an exchange accommodation titleholder for accomplishing reverse exchanges when the taxpayers decide to acquire replacement property before selling the relinquished property. Further, the company offers investment management and trust services to individuals, companies, banks, and trusts; and consulting and management services to clients to start and operate a title insurance agency. It issues title insurance policies directly and through a network of agents in 22 states and the District of Columbia, primarily in the eastern half of the United States. Investors Title Company was founded in 1972 and is headquartered in Chapel Hill, North Carolina.