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Essent Group's (ESNT) Q1 Earnings Beat, Revenues Rise Y/Y

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Essent Group Ltd (ESNT - Free Report) reported first-quarter 2020 operating net income per share of $1.52 cents, which beat the Zacks Consensus Estimate by 23.6%. The bottom line increased 16.9% year over year.

Operational Update

Essent Group recorded total operating revenues of $229 million, which increased 13.9% year over year on higher net investment income (up 3.8%) and net premiums earned (up 16.1%).

Insurance in force increased 15.6% to $165.6 billion.

Persistency, the percentage of insurance remaining in force from one year prior, was 73.9% as of Mar 31, 2020, down 360 basis points (bps) year over year.

New insurance written was $13.5 billion, up 22.7% year over year.

Total expenses increased 2.6% year over year to $52.1 million.

In the quarter under review, loss ratio was 3.9%, which improved 100 basis points year over year.

Essent Group Ltd Price, Consensus and EPS Surprise

Financial Update

Essent Group had $31.1 million in cash, down 56.5% from 2019 end. Total stockholders' equity increased to $3.1 billion, up from nearly $3 billion at 2019 end.

Essent Group had $225 million of term debt outstanding as on Mar 31, 2020 and maintained $75 million of undrawn capacity under the revolving component of its credit facility.

Adjusted book value per share was $30.89 as of Mar 31, 2020.

Return on equity deteriorated 120 basis points to 19.6% at quarter end from 20.8% at 2019 end.

Combined risk-to-capital ratio of the U.S. mortgage insurance business, which includes statutory capital for both Essent Guaranty and Essent Guaranty of PA, was 11.7:1 as of Mar 31, 2020.

Operating cash flow was $163 million in the reported quarter.

Capital Deployment

The board of directors of Essent Group announced a quarterly cash dividend of 16 cents per share. The dividend will be paid out on Jun 12, 2020, to shareholders of record as of Jun 2.

Zacks Rank

Essent Group currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Insurance Releases

Among other players from the insurance industry that have reported first-quarter earnings so far, the bottom line of Brown & Brown, Inc. (BRO - Free Report) beat the Zacks Consensus Estimate while that of RLI Corp. (RLI - Free Report) and Travelers Companies (TRV - Free Report) missed the same.

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