Critical Survey: Investors Title (NASDAQ:ITIC) versus NMI (NASDAQ:NMIH)

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

Analyst Ratings

This is a breakdown of recent recommendations and price targets for NMI and Investors Title, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NMI	0	3	3	0	2.50
Investors Title	0	0	1	0	3.00

NMI presently has a consensus target price of $41.20, indicating a potential upside of 4.25%. Given NMI’s higher possible upside, equities research analysts plainly believe NMI is more favorable than Investors Title.

Insider and Institutional Ownership

94.1% of NMI shares are held by institutional investors. Comparatively, 41.4% of Investors Title shares are held by institutional investors. 3.0% of NMI shares are held by company insiders. Comparatively, 26.4% of Investors Title shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Valuation & Earnings

This table compares NMI and Investors Title”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NMI	$650.97 million	4.67	$360.11 million	$4.78	8.27
Investors Title	$258.30 million	1.82	$31.07 million	$19.01	13.05

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

Volatility & Risk

NMI has a beta of 0.66, indicating that its share price is 34% 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
NMI	55.02%	16.08%	10.79%
Investors Title	13.15%	13.72%	10.47%

Summary

NMI beats Investors Title on 10 of the 14 factors compared between the two stocks.

About NMI

NMI Holdings, Inc. provides private mortgage guaranty insurance services in the United States. The company offers mortgage insurance services, such as primary and pool insurance; and outsourced loan review services to mortgage loan originators. It serves national and regional mortgage banks, money center banks, credit unions, community banks, builder-owned mortgage lenders, internet-sourced lenders, and other non-bank lenders. The company was incorporated in 2011 and is headquartered in Emeryville, California.

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.