Essent Group (NYSE:ESNT) vs. Sampo (OTCMKTS:SAXPY) Critical Survey

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Sampo	N/A	19.63%	5.56%
Essent Group	55.63%	12.40%	9.73%

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sampo	0	2	0	1	2.67
Essent Group	1	4	4	0	2.33

Essent Group has a consensus price target of $65.67, indicating a potential upside of 4.63%. Given Essent Group’s higher probable upside, analysts plainly believe Essent Group is more favorable than Sampo.

Insider & Institutional Ownership

0.0% of Sampo shares are held by institutional investors. Comparatively, 93.0% of Essent Group shares are held by institutional investors. 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 company is poised for long-term growth.

Earnings and Valuation

This table compares Sampo and Essent Group”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sampo	$2.47 billion	50.88	$1.25 billion	$1.39	16.92
Essent Group	$1.24 billion	4.88	$729.40 million	$6.87	9.14

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

Dividends

Sampo pays an annual dividend of $0.31 per share and has a dividend yield of 1.3%. Essent Group pays an annual dividend of $1.24 per share and has a dividend yield of 2.0%. Sampo pays out 22.3% of its earnings in the form of a dividend. Essent Group pays out 18.0% 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 increased its dividend for 6 consecutive years. Essent Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

Sampo has a beta of 0.52, suggesting that its stock price is 48% less volatile than the S&P 500. Comparatively, Essent Group has a beta of 0.91, suggesting that its stock price is 9% less volatile than the S&P 500.

Summary

Essent Group beats Sampo on 11 of the 18 factors compared between the two stocks.

About Sampo

Sampo Oyj, together with its subsidiaries, engages in the provision of non-life insurance products and services in Finland, Sweden, Norway, Denmark, Estonia, Lithuania, Latvia, and the United Kingdom. The company operates through If, Topdanmark, Hastings, Mandatum, and Holding segments. It offers property, casualty, liability, accident, sickness, household, homeowner, motor, travel, marine, aviation, transport, forest, livestock, health, workers compensation, car, van, and bike insurance services, as well as reinsurance services. The company was founded in 1909 and is based in Helsinki, Finland.

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.