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Essent Group (ESNT) Announces Dividend Hike, Stock Down 1.7%

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Essent Group Ltd. (ESNT - Free Report) has announced that its board of directors sequentially hiked the quarterly cash dividend by 4.8% to 22 cents per common share. The dividend will be paid out on Sep 12 to shareholders on record as of Sep 1, 2022.

Although Essent Group has declared a dividend hike with its quarterly earnings results, the company’s shares have declined 1.7% since the announcement of second-quarter results, likely reflecting near-term headwinds in the housing market.

Prior to this, ESNT hiked its dividend by 5% to 21 cents per share in May 2022.
Considering the last day’s closing price of $41.87, Essent Group’s dividend yield currently stands at 2.1%. Not only is the yield attractive for income investors, but it also represents a steady income stream.

Dividend hikes aside, the company has been active on the share repurchase front. In May 2022, it authorized a new share repurchase plan of up to $250 million of the company’s shares through Dec 31, 2023. Further, in April 2022, Essent Group repurchased $22.3 million common shares and completed the prior $250-million share repurchase program, which was authorized in May 2021.

Essent Group has ample liquidity and financial flexibility, with $619 million in cash and available investment for sale and $400-million unused credit facility capacity. A fortified balance sheet might aid ESNT in continuing dividend payments.

The company reported second-quarter 2022 earnings per share of $2.16, which improved from $1.42 in the prior-year quarter. Total revenues of $244.4 million increased marginally year over year on higher income from other invested assets and net investment income.

The company’s efforts to improve its business model and launch a cloud-based AI pricing platform will enhance operating capabilities and drive the overall revenues. This, along with decent earnings strength, will boost the its earnings. Thus, the above factors will help  Essent Group to maintain its capital deployment activities efficiently in the upcoming period and enhance its shareholders’ value.

Over the past year, shares of ESNT have declined 12.5% compared with a 32% fall of the industry it belongs to.

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Essent Group currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Finance Companies Taking Similar Steps

Over the past few months, several finance stocks have rewarded their shareholders with dividend hikes. Some of these are The Charles Schwab Corporation (SCHW - Free Report) and Lazard Ltd (LAZ - Free Report) .

Charles Schwab declared a quarterly cash dividend of 22 cents per share, marking a 10% increase from the prior payout. The dividend will be paid out on Aug 26 to shareholders of record on Aug 12, 2022.

Apart from the dividend hike, Charles Schwab replaced its previous share repurchase program of $1.8 billion and is now authorized to total $15 billion under the new share repurchase program. As of Jun 30, the company had 1.904 billion weighted-average common and common equivalent shares outstanding.

Lazard announced a 6% hike in its quarterly dividend to 50 cents per share on its outstanding Class A common stock. The dividend will be paid out on Aug 19 to LAZ’s shareholders of record on Aug 8, 2022.

Prior to this, LAZ had raised its dividend by 46.9% to 47 cents per share in May 2019.


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