Private mortgage insurance. AGI Score 5/10. P/TB 0.96. Buybacks -11%. $248B insurance in force. 8.4x P/E | Analysis date: 2026-03-13
AGI Score 5/10 — Labor Margin Play. Essent is a private mortgage insurer — one of the most boring, predictable businesses in finance. $248.4B of insurance in force, 514 employees, Bermuda-based holding company. Trading at 0.96x book with an 8.4x P/E and 2.4% dividend yield. Buybacks reducing shares by ~11%. The thesis: mortgage insurance is a regulated toll booth that AGI can make more efficient (lower costs) while the business model persists. At below book value, is the floor high?
Essent provides private mortgage insurance (PMI) for residential mortgages in the US. When a borrower puts less than 20% down, the lender requires PMI. Essent insures the lender against default. Also provides title insurance and reinsurance.
Insurance companies hold large investment portfolios to back policy reserves. Essent's equity is backed by real financial assets.
| Item | Amount | Notes |
|---|---|---|
| Stockholders Equity | ~$5.74B | |
| Book Value / Share | $60.31 | vs $58.09 market = 0.96x |
| Revenue / Employee | $2.45M | Extremely productive workforce |
| Net Income / Employee | $1.34M | Each employee generates $1.3M profit |
| Item | Latest | Notes |
|---|---|---|
| Revenue | $1.26B | |
| Net Income | $690M | 55% net margin |
| Operating Cash Flow | $856M | 15.3% OCF yield |
| FCF | $351M | 6.3% FCF yield |
| EPS | $6.90 | 8.4x P/E |
| Year | Shares | Change |
|---|---|---|
| FY2022 | 107,683,000 | — |
| FY2023 | 106,597,000 | -1.0% |
| FY2024 | 105,015,000 | -1.5% |
| FY2025 | 95,456,000 | -9.1% |
Share count dropped 9.1% in FY2025 alone — the buyback pace is accelerating. Over 3 years, 11.3% total reduction. At below-book prices, every buyback is accretive to remaining shareholders. With $690M net income on ~$560M market cap per year of buybacks, this is a compounding machine.
Current market cap: $5.6B. 10x = $56B. Not realistic for a mortgage insurer.
This is a 2-3x compounder. If EPS grows to $10 in 5 years (via buybacks + modest growth) and trades at 12x P/E = $120/share = 2.1x from today. With dividends, ~2.5x total return.
Floor price: $40-45/share (0.65-0.75x book). Mortgage insurance reserves are regulated and conservatively stated. Below 0.7x book for a 55% margin business with no growth needed to be profitable is very safe.
Entry zone: Below $50/share (0.83x book). At that level, the 8%+ earnings yield plus buybacks create a compelling risk-adjusted return.
Essent is an excellent business — 55% net margins, 514 employees, $690M net income, accelerating buybacks. At 0.96x book and 8.4x P/E, it's close to fair value but not screaming cheap.
Entry target: $45-50/share (0.75-0.83x book). At that level, the floor is solid and the upside from buyback-driven EPS growth is compelling.
Not a 10x, but one of the higher-quality names on this list.
Data sources: SEC EDGAR XBRL, yfinance, 10-K filing, AGI scoring model. Analysis date: 2026-03-13.