Essent Group reports increased quarterly net income and declares dividend By Investing.com

HAMILTON, Bermuda – Essent Group Ltd . (NYSE: NYSE:) has reported a net income increase for the quarter ending June 30, 2024, reaching $203.6 million or $1.91 per diluted share. This performance marks an improvement from the $172.2 million or $1.61 per diluted share registered in the same quarter of the previous year.

Furthermore, Essent’s Board of Directors has declared a quarterly cash dividend of $0.28 per common share, scheduled for payment on September 10, 2024, to shareholders on record as of August 30, 2024.

Mark A. Casale, Chairman and Chief Executive Officer, expressed satisfaction with the company’s second-quarter results, attributing the positive outcome to a robust portfolio and favorable conditions in the housing and labor markets. He also highlighted the significance of the inaugural senior debt offering closed on July 1, which, together with an amended and extended revolving credit facility, has significantly bolstered the company’s holding company liquidity, now exceeding $1.3 billion.

Key financial highlights include new insurance written for the second quarter of 2024, totaling $12.5 billion, up from $8.3 billion in the first quarter of 2024 but down from $13.5 billion in the second quarter of 2023. The insurance in force as of June 30, 2024, stood at $240.7 billion, a slight increase from $238.5 billion as of March 31, 2024, and up from $235.6 billion as of June 30, 2023.

Net investment income for the first half of 2024 also saw a 22% increase from the same period last year, amounting to $108.2 million.

Moreover, Essent entered into an excess of loss transaction with third-party reinsurers, covering 15% of eligible policies written in 2024, and closed two transactions representing approximately $1 billion in total debt capacity.

This information is based on a press release statement.

In other recent news, Essent Group, a Bermuda-based surety insurance provider, reported a net income of $182 million for Q1 2024, up from $171 million year-over-year. The company’s U.S. mortgage insurance in force increased by 3% to $238 billion.

In addition, Essent Group has completed an underwritten public offering of $500 million in 6.250% Senior Notes due 2029, with J.P. Morgan Securities LLC and BofA Securities, Inc. as the lead underwriters. The company has also secured a new $500 million unsecured revolving credit facility, replacing its existing credit arrangement.

Meanwhile, Publicis, a French advertising company, saw its shares surge by 7.7% after surpassing second-quarter earnings expectations. Essity, a Swedish manufacturer of hygiene products, also reported second-quarter core earnings that exceeded market forecasts. Conversely, Nokia (HE:), a Finnish telecommunications equipment company, announced a 32% drop in its quarterly profit.

In analyst notes, RBC Capital has adjusted its price target for Essent Group, reducing it to $61 from $64, while maintaining an Outperform rating. The firm noted Essent’s resilience and strong start to fiscal year 2024 despite challenges posed by high interest rates. These are the recent developments for Essent Group, Publicis, Essity, and Nokia.

InvestingPro Insights

Essent Group Ltd. (NYSE: ESNT) has shown commendable financial resilience, as evidenced by its recent performance metrics. The company’s market capitalization stands at a robust $6.53 billion, reflecting investor confidence in its business model and growth trajectory. Moreover, Essent’s price-to-earnings (P/E) ratio, a critical measure of its valuation, is currently at an attractive 9.09, with a slight adjustment to 9.22 over the last twelve months as of Q1 2024. This indicates that the company’s earnings are strong relative to its share price, making it potentially appealing for value investors.

The company’s revenue growth has also been impressive, with a 12.62% increase over the last twelve months as of Q1 2024. This growth is consistent with the company’s reported net income increase for the quarter ending June 30, 2024. Essent’s ability to maintain a high gross profit margin of 90.35% further underscores its operational efficiency and ability to manage costs effectively.

InvestingPro Tips highlight Essent’s commitment to shareholder returns, with the company having raised its dividend for 5 consecutive years and maintained dividend payments for 6 consecutive years. This consistent dividend policy, coupled with its liquid assets exceeding short-term obligations, provides investors with a sense of security regarding the company’s financial health and its capacity to meet its financial commitments.

For those interested in a deeper dive into Essent’s financial health and future prospects, InvestingPro offers additional tips. Currently, there are 7 more InvestingPro Tips available, providing a comprehensive analysis that could further inform investment decisions. Visit https://www.investing.com/pro/ESNT for more detailed insights.

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