Head to Head Analysis: loanDepot (NYSE:LDI) versus Essent Group (NYSE:ESNT)

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

Analyst Ratings

This is a summary of current ratings and target prices for Essent Group and loanDepot, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Essent Group	0	5	3	0	2.38
loanDepot	3	2	0	0	1.40

Essent Group currently has a consensus price target of $71.86, suggesting a potential upside of 4.50%. loanDepot has a consensus price target of $1.92, suggesting a potential upside of 129.82%. Given loanDepot’s higher probable upside, analysts plainly believe loanDepot is more favorable than Essent Group.

Insider and Institutional Ownership

93.0% of Essent Group shares are held by institutional investors. Comparatively, 39.4% of loanDepot shares are held by institutional investors. 3.6% of Essent Group shares are held by insiders. Comparatively, 65.9% of loanDepot shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility & Risk

Essent Group has a beta of 0.76, indicating that its share price is 24% less volatile than the S&P 500. Comparatively, loanDepot has a beta of 3.4, indicating that its share price is 240% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Essent Group	51.45%	11.91%	9.09%
loanDepot	-5.52%	-28.25%	-1.56%

Earnings & Valuation

This table compares Essent Group and loanDepot”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Essent Group	$1.35 billion	4.58	$689.97 million	$7.17	9.59
loanDepot	$1.19 billion	0.24	-$62.65 million	($0.30)	-2.78

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

Summary

Essent Group beats loanDepot on 11 of the 14 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 loanDepot

loanDepot, Inc. engages in originating, financing, selling, and servicing residential mortgage loans in the United States. The company offers conventional agency-conforming and prime jumbo, federal assistance residential mortgage, and home equity loans. It also provides settlement services, which include captive title and escrow business; real estate services that cover captive real estate referral business; and insurance services, including services to homeowners, as well as other consumer insurance policies. The company was founded in 2010 and is headquartered in Irvine, California.