Essent Group (NYSE: ESNT) and Loews Corporation (NYSE:L) are both large-cap property & casualty insurance – nec companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, valuation, earnings, institutional ownership, risk, analyst recommendations and profitability.
Loews Corporation pays an annual dividend of $0.25 per share and has a dividend yield of 0.5%. Essent Group does not pay a dividend. Loews Corporation pays out 8.7% of its earnings in the form of a dividend.
This is a breakdown of recent ratings and target prices for Essent Group and Loews Corporation, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Essent Group currently has a consensus price target of $44.86, suggesting a potential upside of 10.84%. Loews Corporation has a consensus price target of $35.00, suggesting a potential downside of 29.45%. Given Essent Group’s stronger consensus rating and higher probable upside, analysts plainly believe Essent Group is more favorable than Loews Corporation.
Insider & Institutional Ownership
81.6% of Essent Group shares are held by institutional investors. Comparatively, 58.8% of Loews Corporation shares are held by institutional investors. 18.1% of Essent Group shares are held by insiders. Comparatively, 11.8% of Loews Corporation shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Volatility & Risk
Essent Group has a beta of 1.15, indicating that its stock price is 15% more volatile than the S&P 500. Comparatively, Loews Corporation has a beta of 0.75, indicating that its stock price is 25% less volatile than the S&P 500.
This table compares Essent Group and Loews Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Earnings & Valuation
This table compares Essent Group and Loews Corporation’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Essent Group||$458.26 million||8.69||$222.60 million||$2.81||14.40|
|Loews Corporation||$13.11 billion||1.27||$654.00 million||$2.88||17.23|
Loews Corporation has higher revenue and earnings than Essent Group. Essent Group is trading at a lower price-to-earnings ratio than Loews Corporation, indicating that it is currently the more affordable of the two stocks.
Essent Group beats Loews Corporation on 11 of the 16 factors compared between the two stocks.
About Essent Group
Essent Group Ltd. is a private mortgage insurance company. The Company is engaged in offering private mortgage insurance and reinsurance for mortgages secured by residential properties located in the United States. Its products and services include mortgage insurance, contract underwriting, and Bermuda-based insurance and reinsurance. The Company’s primary mortgage insurance is offered to customers on individual loans at the time of origination on a flow basis, but can also be written in bulk transactions. Its pool insurance provides additional credit enhancement for certain secondary market and other mortgage transactions. The primary mortgage insurance operations were conducted through Essent Guaranty, Inc. which is a mortgage insurer licensed to write mortgage insurance in all 50 states and the District of Columbia, as of December 31, 2016. It offers primary mortgage insurance, pool insurance and master policy. It provides contract underwriting services through CUW Solutions, LLC.
About Loews Corporation
Loews Corporation is a holding company. The Company, through its subsidiaries, is engaged in commercial property and casualty insurance; operation of offshore oil and gas drilling rigs; transportation and storage of natural gas and natural gas liquids, and operation of a chain of hotels. The Company has five segments consisted of its four individual operating subsidiaries, CNA Financial Corporation (CNA), Diamond Offshore Drilling, Inc. (Diamond Offshore), Boardwalk Pipeline Partners, LP (Boardwalk Pipeline) and Loews Hotels Holding Corporation (Loews Hotels), and the Corporate segment. CNA’s insurance products include commercial property and casualty coverages, including surety. CNA’s services include risk management, information services, warranty and claims administration. CNA’s core business, commercial property and casualty insurance operations include Specialty, Commercial and International lines of business.
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