Essex Property Trust (NYSE:ESS) and Essent Group (NYSE:ESNT) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their dividends, valuation, analyst recommendations, institutional ownership, risk, profitability and earnings.
Dividends
Essex Property Trust pays an annual dividend of $8.31 per share and has a dividend yield of 3.1%. Essent Group pays an annual dividend of $0.64 per share and has a dividend yield of 1.5%. Essex Property Trust pays out 62.1% of its earnings in the form of a dividend. Essent Group pays out 11.3% 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. Essex Property Trust has increased its dividend for 27 consecutive years and Essent Group has increased its dividend for 1 consecutive years. Essex Property Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Institutional and Insider Ownership
95.4% of Essex Property Trust shares are held by institutional investors. Comparatively, 95.4% of Essent Group shares are held by institutional investors. 3.5% of Essex Property Trust shares are held by company insiders. Comparatively, 2.9% of Essent Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Valuation & Earnings
This table compares Essex Property Trust and Essent Group's gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Essex Property Trust | $1.46 billion | 11.79 | $439.29 million | $13.38 | 19.80 |
| Essent Group | $867.57 million | 5.50 | $555.71 million | $5.66 | 7.47 |
Essent Group has lower revenue, but higher earnings than Essex Property Trust. Essent Group is trading at a lower price-to-earnings ratio than Essex Property Trust, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a summary of current ratings for Essex Property Trust and Essent Group, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Essex Property Trust | 1 | 9 | 7 | 0 | 2.35 |
| Essent Group | 1 | 3 | 7 | 0 | 2.55 |
Essex Property Trust currently has a consensus price target of $255.1333, indicating a potential downside of 3.68%. Essent Group has a consensus price target of $47.5455, indicating a potential upside of 12.48%. Given Essent Group's stronger consensus rating and higher possible upside, analysts plainly believe Essent Group is more favorable than Essex Property Trust.
Profitability
This table compares Essex Property Trust and Essent Group's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Essex Property Trust | 39.89% | 9.46% | 4.57% |
| Essent Group | 46.59% | 12.97% | 9.66% |
Volatility and Risk
Essex Property Trust has a beta of 0.79, indicating that its stock price is 21% less volatile than the S&P 500. Comparatively, Essent Group has a beta of 1.34, indicating that its stock price is 34% more volatile than the S&P 500.
Summary
Essent Group beats Essex Property Trust on 9 of the 16 factors compared between the two stocks.
