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Essent Group Ltd. (ESNT) vs Radian Group Inc. (RDN)

Essent Group Ltd. and Radian Group Inc. are both Insurance Specialty companies. Essent Group Ltd. is the larger, with a market value of $6.2B against $4.9B — 1.3× the size. Radian Group Inc. trades at the lower P/E: 9.5× against 9.5×. Radian Group Inc. grew revenue faster over the last twelve months: 41.9% against 4.31%. Essent Group Ltd. has the higher net margin (51.5% vs 32.6%) and the higher return on invested capital (8.77% vs 7.69%). Both pay a dividend; Radian Group Inc. yields more (2.75% vs 1.98%). Across the 21 metrics below, Radian Group Inc. leads on 12 and Essent Group Ltd. on 9.

Valuation

Metric ESNT RDN Insurance Specialty median
P/E 9.49 9.47 9.49
P/S 4.71 3.06 1.69
P/B 1.10 1.05 1.23
Price to free cash flow 7.54 3.61 8.44
EV/EBITDA — — —
EV/Sales — — —
Earnings yield 10.54% 10.56% 10.48%
Free cash flow yield 13.27% 27.67% 10.87%

Profitability

Metric ESNT RDN Insurance Specialty median
Gross margin 64.51% 69.22% 56.22%
Operating margin 64.51% 48.72% 15.19%
Net margin 51.45% 32.60% 13.80%
Free cash flow margin 62.43% 84.53% 34.47%
Return on equity 12.01% 11.53% 12.01%
Return on assets 9.19% 5.30% 3.55%
Return on invested capital 8.77% 7.69% 9.88%

Growth

Metric ESNT RDN Insurance Specialty median
Revenue growth (TTM) 4.31% 41.92% 7.68%
EPS growth (last fiscal year) 0.73% 5.61% 8.65%
Revenue growth, 5-year CAGR 5.71% (3.61%) 2.24%
Net income growth, 5-year CAGR 10.81% 8.16% 0.00%

Health

Metric ESNT RDN Insurance Specialty median
Debt to equity 0.09 0.26 0.16
Current ratio 0.31 0.39 0.52
Net debt to EBITDA 0.43 1.20 0.28

Dividend

Metric ESNT RDN Insurance Specialty median
Dividend yield 1.98% 2.75% 2.06%
Payout ratio 0.19 0.26 0.19

Size

Metric ESNT RDN Insurance Specialty median
Market cap 6.17b 4.93b 3.31b

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