NMI Holdings (NASDAQ: NMIH) and Fidelity National Financial (NYSE:FNFV) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, valuation, analyst recommendations, institutional ownership, earnings, profitability and dividends.
This table compares NMI Holdings and Fidelity National Financial’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Fidelity National Financial||6.75%||1.73%||0.83%|
Risk and Volatility
NMI Holdings has a beta of 0.64, indicating that its stock price is 36% less volatile than the S&P 500. Comparatively, Fidelity National Financial has a beta of 0.79, indicating that its stock price is 21% less volatile than the S&P 500.
This is a summary of recent recommendations for NMI Holdings and Fidelity National Financial, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Fidelity National Financial||0||1||0||0||2.00|
NMI Holdings presently has a consensus price target of $13.20, indicating a potential upside of 14.29%. Fidelity National Financial has a consensus price target of $16.00, indicating a potential downside of 5.33%. Given NMI Holdings’ stronger consensus rating and higher probable upside, equities analysts clearly believe NMI Holdings is more favorable than Fidelity National Financial.
Valuation & Earnings
This table compares NMI Holdings and Fidelity National Financial’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|NMI Holdings||$151.40 million||4.57||$53.06 million||$1.30||8.88|
|Fidelity National Financial||$1.32 billion||0.83||$34.00 million||$1.59||10.63|
NMI Holdings has higher revenue, but lower earnings than Fidelity National Financial. NMI Holdings is trading at a lower price-to-earnings ratio than Fidelity National Financial, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
80.7% of NMI Holdings shares are owned by institutional investors. Comparatively, 85.0% of Fidelity National Financial shares are owned by institutional investors. 5.4% of NMI Holdings shares are owned by insiders. Comparatively, 5.4% of Fidelity National Financial shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
NMI Holdings beats Fidelity National Financial on 9 of the 13 factors compared between the two stocks.
NMI Holdings Company Profile
NMI Holdings, Inc. (NMIH) provides private mortgage guaranty insurance through its insurance subsidiaries. The Company’s primary insurance subsidiary, National Mortgage Insurance Corporation (NMIC), is a mortgage insurance (MI) provider on loans purchased by the Government-sponsored enterprises (GSEs). Its reinsurance subsidiary, National Mortgage Reinsurance Inc One (Re One), provides reinsurance to NMIC on certain loans insured by NMIC. NMIH’s subsidiary, NMI Services, Inc. (NMIS), provides outsourced loan review services to mortgage loan originators. Its Primary mortgage insurance provides mortgage default protection on individual loans at specified coverage percentages. Primary insurance may be written on a flow basis, in which loans are insured as loan originations occur in individual, loan-by-loan transactions, or an aggregated basis, in which each loan in a portfolio of loans is individually insured in a single transaction, typically after the loans have been originated.
Fidelity National Financial Company Profile
Fidelity National Financial, Inc. (FNF) is a holding company. The Company is a provider of title insurance, technology and transaction services to the real estate and mortgage industries. The Company’s segments include Title, Black Knight, FNF Core Corporate and Other, Restaurant Group, and FNFV Corporate and Other. Its business is organized into groups, including FNF Group and FNF Ventures (FNFV). The Company offers title insurance through its title insurance underwriters: Fidelity National Title Insurance Company, Chicago Title Insurance Company, Commonwealth Land Title Insurance Company, Alamo Title Insurance and National Title Insurance of New York Inc., which collectively issue title insurance policies. FNF Group also provides mortgage technology solutions, including MSP, a residential mortgage servicing technology platform in the United States, through its subsidiary, Black Knight Financial Services, Inc. (Black Knight).
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