First American vs Essent

This page compares First American Financial Corporation and Essent Group Ltd, examining their business models, financial performance, and market context in a clear, neutral way. It considers risk management, growth approaches, and strategy within the financial services landscape for stakeholders. Educational content, not financial advice.

This page compares First American Financial Corporation and Essent Group Ltd, examining their business models, financial performance, and market context in a clear, neutral way. It considers risk mana...

Comparison Snapshot

Key Financial Metrics

FAF

Metric

ESNT

$6.25B

Market Cap

$5.88B

20.80%

Potential Profit

8.66%

Buy

Analyst Rating

Buy

Investment Analysis

First American

FAF

Pros

Reported Q3 2025 earnings and revenues exceeded analyst expectations, indicating strong recent financial performance.
The company has a robust gross margin of about 63%, reflecting efficient core operations and cost control.
Consistent dividend payouts with a 5/6 dividend score, making it attractive for income-focused investors.

Considerations

Low future growth score (1/6) indicates limited projected expansion prospects relative to peers.
Price-to-earnings ratio of approximately 35.7x is high compared to sector average, suggesting potentially stretched valuation.
Market dynamics show surging refinancing but declines in purchase and commercial segments, signaling exposure to cyclical risks.

Essent

ESNT

Pros

Essent Group Ltd is a leading provider in the US private mortgage insurance and reinsurance market, giving it a strong competitive position.
The company benefits from rising demand in the US housing market for mortgage insurance products, supporting growth.
Appears to have a market cap around $6 billion, positioning it as a sizable player in specialty insurance with focused expertise.

Considerations

Highly exposed to US housing market cycles, increasing vulnerability to downturns in mortgage origination or refinancing volumes.
Limited diversification beyond private mortgage insurance and reinsurance may create concentration risk.
Subject to regulatory changes in mortgage insurance policies which could impact profitability and operational flexibility.

About The Companies

First American (FAF)

First American Financial Corporation (FAF) is a US-based provider of title insurance, settlement services and real-estate data and analytics supporting property transactions. The company earns fees when homes are bought, sold or refinanced, so revenue and profit tend to track housing-market activity, mortgage volumes and interest-rate moves. With a market cap of about $6.22 billion, First American operates across many regional markets and maintains underwriting reserves to handle title claims. Key things investors usually watch are transaction volumes, margin trends, reserve strength and regulatory or litigation developments. Strengths include an entrenched market position and valuable property data assets; risks include cyclical demand tied to the housing market, legal exposure from title defects or claims, and competitive or technological disruption. This summary is for general educational purposes only and not personalised investment advice; values can rise and fall and past performance is not a reliable indicator of future returns.

Essent (ESNT)

Essent Group Ltd. is a holding company, based in Bermuda, that plays a specialised role in the US housing finance system. Through its subsidiaries, it primarily offers private mortgage insurance (PMI) and reinsurance. This insurance protects mortgage lenders and investors from losses if a borrower defaults on their home loan, which is particularly relevant for mortgages with a lower down payment. Its main subsidiary, Essent Guaranty, Inc., is a key provider in the US market. The company also engages in reinsurance through Essent Reinsurance Ltd. and provides some contract underwriting services. For investors, Essent represents a focused play on the health of the US housing market and the ongoing need for credit risk management. The company's performance is often tied to employment trends, home price appreciation, and the overall volume of mortgage lending. As with any financial company, its value can rise as well as fall.

Which Baskets Do They Appear In?

The Great Mortgage Privatization

The planned IPOs for mortgage giants Fannie Mae and Freddie Mac signal a historic shift toward privatization in the U.S. housing market. This move stands to benefit not only the investment banks managing the deal but also a wider ecosystem of mortgage lenders and insurers.

Published: August 11, 2025

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Which Baskets Do They Appear In?

The Great Mortgage Privatization

The planned IPOs for mortgage giants Fannie Mae and Freddie Mac signal a historic shift toward privatization in the U.S. housing market. This move stands to benefit not only the investment banks managing the deal but also a wider ecosystem of mortgage lenders and insurers.

Published: August 11, 2025

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Comparison Snapshot