loanDepot (NYSE:LDI – Get Free Report) and Essent Group (NYSE:ESNT – Get Free Report) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, earnings, dividends, profitability, valuation and risk.
Profitability
This table compares loanDepot and Essent Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| loanDepot | -5.52% | -28.25% | -1.56% |
| Essent Group | 51.45% | 11.91% | 9.09% |
Valuation & Earnings
This table compares loanDepot and Essent Group”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| loanDepot | $1.19 billion | 0.20 | -$62.65 million | ($0.30) | -2.32 |
| Essent Group | $1.26 billion | 4.79 | $689.97 million | $7.17 | 9.37 |
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.
Volatility and Risk
loanDepot has a beta of 3.4, suggesting that its stock price is 240% more volatile than the S&P 500. Comparatively, Essent Group has a beta of 0.76, suggesting that its stock price is 24% less volatile than the S&P 500.
Analyst Ratings
This is a breakdown of recent recommendations and price targets for loanDepot and Essent Group, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| loanDepot | 3 | 2 | 0 | 0 | 1.40 |
| Essent Group | 0 | 5 | 3 | 0 | 2.38 |
loanDepot currently has a consensus target price of $1.92, indicating a potential upside of 175.78%. Essent Group has a consensus target price of $71.86, indicating a potential upside of 6.93%. Given loanDepot’s higher possible upside, equities analysts clearly believe loanDepot is more favorable than Essent Group.
Institutional and Insider Ownership
39.4% of loanDepot shares are held by institutional investors. Comparatively, 93.0% of Essent Group shares are held by institutional investors. 65.9% of loanDepot shares are held by insiders. Comparatively, 3.6% of Essent Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Summary
Essent Group beats loanDepot on 11 of the 14 factors compared between the two stocks.
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.
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.
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