ESNT

Essent Group is a private mortgage insurer (PMI) with an exceptionally profitable, capital-light model. FY2025 revenue grew 1.5% to $1.26B and net income was $690M — a remarkable 54.7% net margin that reflects the favorable economics of mortgage insurance during a benign credit environment with low default rates. Net income dipped 5.4% year-over-year, but diluted EPS actually rose 0.7% to $6.90 because the company aggressively retired stock. Earnings have been consistently strong, ranging $682M-$831M over the past five years, demonstrating durable underwriting profitability across rate cycles.

The balance sheet is a fortress, as required of a monoline insurer: $5.76B equity against just $1.68B total liabilities (0.29x liabilities/equity), with retained earnings up 12.1% to $5.26B. This capital strength supports both the insurance-in-force and an aggressive return program. Buybacks exploded to $588M (up 426.9%), shrinking the share count 8.9% to 94.5M — a powerful per-share tailwind — alongside $122M of dividends (up 3.4%). Operating cash flow was robust and stable at $856M, comfortably funding the entire capital return.