Head-To-Head Analysis: Essent Group (NYSE:ESNT) versus Block (NYSE:XYZ)

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

Earnings and Valuation

This table compares Block and Essent Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Block	$24.19 billion	1.90	$1.31 billion	$0.56	136.37
Essent Group	$1.26 billion	4.78	$689.97 million	$7.17	9.35

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

Volatility & Risk

Block has a beta of 2.55, indicating that its stock price is 155% more volatile than the S&P 500. Comparatively, Essent Group has a beta of 0.76, indicating that its stock price is 24% less volatile than the S&P 500.

Insider & Institutional Ownership

70.4% of Block shares are held by institutional investors. Comparatively, 93.0% of Essent Group shares are held by institutional investors. 11.4% of Block 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 hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current recommendations and price targets for Block and Essent Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Block	0	9	29	3	2.85
Essent Group	0	7	3	0	2.30

Block currently has a consensus price target of $95.61, indicating a potential upside of 25.21%. Essent Group has a consensus price target of $70.75, indicating a potential upside of 5.58%. Given Block’s stronger consensus rating and higher possible upside, research analysts plainly believe Block is more favorable than Essent Group.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Block	1.43%	8.10%	4.53%
Essent Group	51.45%	11.91%	9.09%

Summary

Block beats Essent Group on 9 of the 15 factors compared between the two stocks.

About Block

Square, Inc. provides payment and point-of-sale solutions in the United States and internationally. The company's commerce ecosystem includes point-of-sale software and hardware that enables sellers to turn mobile and computing devices into payment and point-of-sale solutions. It offers hardware products, including Magstripe reader, which enables swiped transactions of magnetic stripe cards; Contactless and chip reader that accepts EMV® chip cards and Near Field Communication payments; Chip card reader, which accepts EMV® chip cards and enables swiped transactions of magnetic stripe cards; Square Stand, which enables an iPad to be used as a payment terminal or full point of sale solution; and Square Register that combines its hardware, point-of-sale software, and payments technology, as well as managed payments solutions. The company also provides Square Point of Sale software; Cash App, which provides access to the financial system, allowing customers to electronically send, store, and spend money; Caviar, a food ordering platform for restaurants to offer food ordering, pickup and delivery, to their customers; and Square Capital that facilitates loans to sellers based on real-time payment and point-of-sale data. Square, Inc. was founded in 2009 and is headquartered in San Francisco, 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.