Acacia Research (NASDAQ:ACTG – Get Free Report) and Essent Group (NYSE:ESNT – Get Free Report) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, earnings, analyst recommendations, valuation, profitability, dividends and institutional ownership.
Risk & Volatility
Acacia Research has a beta of 0.51, suggesting that its stock price is 49% less 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.
Earnings and Valuation
This table compares Acacia Research and Essent Group”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Acacia Research | $285.23 million | 1.45 | $21.68 million | ($0.15) | -28.20 |
| Essent Group | $1.26 billion | 4.61 | $689.97 million | $7.17 | 9.03 |
Essent Group has higher revenue and earnings than Acacia Research. Acacia Research is trading at a lower price-to-earnings ratio than Essent Group, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a summary of current ratings for Acacia Research and Essent Group, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Acacia Research | 1 | 0 | 1 | 0 | 2.00 |
| Essent Group | 0 | 6 | 3 | 0 | 2.33 |
Acacia Research currently has a consensus price target of $6.00, suggesting a potential upside of 41.84%. Essent Group has a consensus price target of $71.14, suggesting a potential upside of 9.92%. Given Acacia Research’s higher possible upside, equities research analysts clearly believe Acacia Research is more favorable than Essent Group.
Profitability
This table compares Acacia Research and Essent Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Acacia Research | -5.39% | 0.44% | 0.33% |
| Essent Group | 51.45% | 11.91% | 9.09% |
Institutional and Insider Ownership
86.7% of Acacia Research shares are held by institutional investors. Comparatively, 93.0% of Essent Group shares are held by institutional investors. 1.7% of Acacia Research shares are held by company insiders. Comparatively, 3.6% of Essent Group shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Summary
Essent Group beats Acacia Research on 13 of the 14 factors compared between the two stocks.
About Acacia Research
Acacia is a publicly traded (Nasdaq: ACTG) company that is focused on acquiring and operating businesses across the industrial, energy and technology sectors where it believes it can leverage its expertise, significant capital base, and deep industry relationships to drive value. Acacia evaluates opportunities based on the attractiveness of the underlying cash flows, without regard to a specific investment horizon. Acacia operates its businesses based on three key principles of people, process, and performance and has built a management team with demonstrated expertise in research, transactions and execution, and operations and management.
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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