Head to Head Comparison: Essent Group (NYSE:ESNT) vs. Jack Henry & Associates (NASDAQ:JKHY)

Essent Group (NYSE:ESNT) and Jack Henry & Associates (NASDAQ:JKHY) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, institutional ownership, analyst recommendations, risk, dividends, earnings and valuation.

Profitability

This table compares Essent Group and Jack Henry & Associates’ 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%
Jack Henry & Associates	19.76%	23.49%	16.34%

Earnings & Valuation

This table compares Essent Group and Jack Henry & Associates”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Essent Group	$1.26 billion	4.88	$689.97 million	$7.17	9.55
Jack Henry & Associates	$2.54 billion	4.76	$502.78 million	$6.97	24.46

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

Insider and Institutional Ownership

93.0% of Essent Group shares are owned by institutional investors. Comparatively, 98.8% of Jack Henry & Associates shares are owned by institutional investors. 3.6% of Essent Group shares are owned by company insiders. Comparatively, 0.6% of Jack Henry & Associates shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Essent Group and Jack Henry & Associates, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Essent Group	0	5	3	0	2.38
Jack Henry & Associates	0	4	11	1	2.81

Essent Group presently has a consensus price target of $71.86, suggesting a potential upside of 4.93%. Jack Henry & Associates has a consensus price target of $190.07, suggesting a potential upside of 11.47%. Given Jack Henry & Associates’ stronger consensus rating and higher probable upside, analysts plainly believe Jack Henry & Associates is more favorable than Essent Group.

Risk and Volatility

Essent Group has a beta of 0.76, indicating that its share price is 24% less volatile than the S&P 500. Comparatively, Jack Henry & Associates has a beta of 0.55, indicating that its share price is 45% less volatile than the S&P 500.

Dividends

Essent Group pays an annual dividend of $1.40 per share and has a dividend yield of 2.0%. Jack Henry & Associates pays an annual dividend of $2.44 per share and has a dividend yield of 1.4%. Essent Group pays out 19.5% of its earnings in the form of a dividend. Jack Henry & Associates pays out 35.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Essent Group has raised its dividend for 6 consecutive years and Jack Henry & Associates has raised its dividend for 35 consecutive years. Essent Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Jack Henry & Associates beats Essent Group on 10 of the 18 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 Jack Henry & Associates

Jack Henry & Associates, Inc. is a financial technology company, which engages in the provision of technology solutions and payment processing services. It operates through the following segments: Core, Payments, Complementary, and Corporate and Other. The Core segment provides core information processing platforms to banks and credit unions which consist of integrated applications required to process deposit, loan, and general ledger transactions, and maintain centralized customer and member information. The Payments segment includes secure payment processing tools and services including ATM, debit, and credit card processing services, online and mobile bill pay solutions, ACH origination and remote deposit capture processing, and risk management products and services. The Complementary segment focuses on additional software, hosted processing platforms, and services including call center support, network security management, consulting, and monitoring. The Corporate and Other segment offers hardware and other products. The company was founded by Jerry D. Hall and John W. Henry in 1976 and is headquartered in Monett, MO.