Critical Comparison: NMI (NASDAQ:NMIH) and MS&AD Insurance Group (OTCMKTS:MSADY)

NMI (NASDAQ:NMIH) and MS&AD Insurance Group (OTCMKTS:MSADY) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, dividends, risk, profitability, analyst recommendations, earnings and institutional ownership.

Institutional & Insider Ownership

94.1% of NMI shares are owned by institutional investors. Comparatively, 0.0% of MS&AD Insurance Group shares are owned by institutional investors. 3.0% of NMI shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent recommendations for NMI and MS&AD Insurance Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NMI	0	3	4	0	2.57
MS&AD Insurance Group	0	1	0	0	2.00

NMI presently has a consensus target price of $42.17, suggesting a potential upside of 14.49%. Given NMI’s stronger consensus rating and higher probable upside, equities analysts clearly believe NMI is more favorable than MS&AD Insurance Group.

Earnings & Valuation

This table compares NMI and MS&AD Insurance Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NMI	$692.21 million	4.13	$360.11 million	$4.78	7.71
MS&AD Insurance Group	$43.74 billion	0.76	$4.56 billion	$3.12	6.58

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

Risk and Volatility

NMI has a beta of 0.63, indicating that its stock price is 37% less volatile than the S&P 500. Comparatively, MS&AD Insurance Group has a beta of 0.37, indicating that its stock price is 63% less volatile than the S&P 500.

Profitability

This table compares NMI and MS&AD Insurance Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NMI	55.02%	16.42%	10.99%
MS&AD Insurance Group	10.57%	16.56%	2.63%

Summary

NMI beats MS&AD Insurance Group on 11 of the 14 factors compared between the two stocks.

About NMI

NMI Holdings, Inc. provides private mortgage guaranty insurance services in the United States. The company offers mortgage insurance services, such as primary and pool insurance; and outsourced loan review services to mortgage loan originators. It serves national and regional mortgage banks, money center banks, credit unions, community banks, builder-owned mortgage lenders, internet-sourced lenders, and other non-bank lenders. The company was incorporated in 2011 and is headquartered in Emeryville, California.

About MS&AD Insurance Group

MS&AD Insurance Group Holdings, Inc., an insurance holding company, provides insurance and financial services worldwide. The company offers domestic non-life insurance; life insurance; international business; financial services; and provides risk-related services. The company was formerly known as Mitsui Sumitomo Insurance Group Holdings, Inc. and changed its name to MS&AD Insurance Group Holdings, Inc. in April 2010. MS&AD Insurance Group Holdings, Inc. was founded in 1918 and is headquartered in Tokyo, Japan.