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Enact Holdings (ACT)
NASDAQ:ACT
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Enact Holdings
(NASDAQ:ACT)
80Outperform
Enact Holdings (ACT) vs. S&P 500 (SPY)
Market Cap
$5.10B
Dividend Yield2.17%
Average Volume (3M)260.47K
Price to Earnings (P/E)7.8
Beta (1Y)0.55
Revenue Growth4.17%
EPS Growth6.47%
CountryUS
Employees465
SectorFinancial
Sector Strength77
IndustryInsurance
Share Statistics
EPS (TTM)4.37
Shares Outstanding151,882,160
10 Day Avg. Volume258,374
30 Day Avg. Volume260,466
Financial Highlights & Ratios
PEG Ratio1.21
Price to Book (P/B)N/A
Price to Sales (P/S)4.26
Price to Cash Flow (P/CF)6.80
P/FCF Ratio6.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$38.33Price Target Upside14.11% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering4
Enact Holdings Business Overview & Revenue Model
Company DescriptionEnact Holdings, Inc. is a leading provider of private mortgage insurance in the United States. The company operates in the financial services sector and primarily focuses on offering mortgage insurance solutions to lenders and borrowers. Enact Holdings aims to help people responsibly achieve and maintain the dream of homeownership by protecting lenders and investors against losses related to borrower defaults.
How the Company Makes MoneyEnact Holdings makes money primarily through the premiums it charges for its mortgage insurance products. The company provides insurance coverage to mortgage lenders, which protects them against potential losses if a borrower defaults on a home loan. These premiums are the core revenue stream for Enact Holdings. Additionally, the company may benefit from investment income generated from the premiums collected, which are invested in various financial instruments. Key factors contributing to its earnings include the volume of new insurance written, the persistency of existing policies, and the overall performance of the housing and mortgage markets.
Enact Holdings Financial Statement Overview
Summary
Enact Holdings exhibits a strong financial foundation with robust profitability, zero debt reliance, and substantial equity. The company’s consistent revenue growth, high profit margins, and strong cash flows reinforce its stability and growth potential. Despite the absence of EBITDA reporting, the overall financial health remains solid, positioning the company well for future opportunities and challenges in the insurance industry.Income Statement
Enact Holdings shows strong profitability with a consistent increase in Total Revenue from $1,156,686,000 in 2023 to $1,201,774,000 in 2024, representing a revenue growth of approximately 4.2%. The company maintains a high Gross Profit Margin of 100% due to zero cost of goods sold. Additionally, a Net Profit Margin of 57.2% in 2024 indicates robust profitability, supported by a consistent rise in EBIT Margin from 78.3% in 2023 to 82.2% in 2024. However, the absence of reported EBITDA figures could limit the comprehensive analysis of operational efficiency.88
Very Positive
Balance Sheet
The balance sheet reflects a solid financial position with a Debt-to-Equity Ratio of 0 in 2024, demonstrating no reliance on debt financing. A Return on Equity (ROE) of 13.8% in 2024 underscores effective management in generating profits from shareholders’ equity. Additionally, an Equity Ratio of 76.6% suggests a strong equity base relative to total assets, which enhances financial stability and reduces financial risk.92
Very Positive
Cash Flow
The cash flow statement indicates healthy cash generation with an Operating Cash Flow to Net Income Ratio of 1.0 in 2024, showing efficient conversion of net income into cash. A Free Cash Flow of $686,262,000 in 2024 demonstrates strong cash availability for reinvestment or shareholder returns. However, the Free Cash Flow Growth Rate is limited due to a high base effect from the prior year, indicating moderate growth potential in cash flow.85
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.20B | 1.15B | 1.10B | 1.12B | 1.11B | Gross Profit |
| 1.20B | 1.15B | 1.10B | 1.12B | 1.11B | EBIT |
| 988.46M | 903.38M | 949.92M | 691.38M | 466.84M | EBITDA |
| 0.00 | 0.00 | 0.00 | 0.00 | 466.84M | Net Income Common Stockholders |
| 688.07M | 665.51M | 704.16M | 546.68M | 370.42M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 6.22B | 615.68M | 5.40B | 5.69B | 5.50B | Total Assets |
| 6.52B | 6.19B | 5.71B | 5.87B | 5.65B | Total Debt |
| 743.05M | 745.42M | 742.83M | 740.42M | 738.16M | Net Debt |
| 143.62M | 129.73M | 229.06M | 314.59M | 285.37M | Total Liabilities |
| 1.53B | 1.56B | 1.61B | 742.00M | 774.97M | Stockholders Equity |
| 5.00B | 4.63B | 4.10B | 4.11B | 3.88B |
| Cash Flow | Free Cash Flow | |||
| 686.26M | 632.04M | 567.13M | -113.53M | 704.35M | Operating Cash Flow |
| 686.26M | 632.04M | 560.51M | 572.12M | 704.35M | Investing Cash Flow |
| -320.51M | -229.40M | -220.25M | -398.78M | -1.14B | Financing Cash Flow |
| -382.00M | -300.73M | -252.31M | -200.29M | 300.30M |
Enact Holdings Technical Analysis
Negative
33.59
Price Trends
33.07
Positive
33.63
Negative
33.24
Negative
Market Momentum
0.12
Positive
44.01
Neutral
31.00
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ACT, the sentiment is Negative. The current price of 33.59 is above the 20-day moving average (MA) of 33.58, above the 50-day MA of 33.07, and above the 200-day MA of 33.24, indicating a neutral trend. The MACD of 0.12 indicates Positive momentum. The RSI at 44.01 is Neutral, neither overbought nor oversold. The STOCH value of 31.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ACT.
Enact Holdings Risk Analysis
Enact Holdings disclosed 39 risk factors in its most recent earnings report. Enact Holdings reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Enact Holdings Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $5.10B | 7.81 | 14.29% | 2.17% | 4.17% | 6.47% | |
75 Outperform | $4.64B | 8.18 | 13.40% | 3.09% | 3.79% | 3.86% | |
75 Outperform | $2.72B | 7.82 | 17.38% | ― | 12.43% | 15.32% | |
75 Outperform | $5.77B | 8.23 | 13.63% | 1.99% | 11.88% | 5.54% | |
72 Outperform | $407.97M | 9.05 | 9.34% | ― | 261.08% | ― | |
70 Outperform | $5.64B | 8.23 | 14.75% | 2.12% | 4.52% | 15.94% | |
64 Neutral | $13.80B | 10.64 | 9.23% | 4.22% | 17.66% | -7.66% |
* Financial Sector Average
Performance Comparison
ACT
Enact Holdings
33.10
3.89
13.32%
ACTG
Acacia Research
4.23
0.21
5.22%
MTG
MGIC Investment
22.81
2.33
11.38%
RDN
Radian Group
31.07
0.38
1.24%
ESNT
Essent Group
54.56
-0.31
-0.56%
NMIH
NMI Holdings
34.46
4.33
14.37%
Enact Holdings Earnings Call Summary
Earnings Call Date: Feb 4, 2025 | % Change Since: 0.51% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Positive
The earnings call highlighted significant achievements in terms of record operating income, strong capital returns, and favorable credit rating upgrades, reflecting a robust financial position. However, natural disasters impacted delinquency rates, and some metrics like GAAP net income showed declines. Despite these challenges, the company's strategic execution and disciplined expense management contribute to a generally positive outlook.Highlights
Record High Adjusted Operating Income
For the full year, adjusted operating income reached a new record high of $718 million or $4.56 per diluted share, up 9% year over year.
Strong Capital Returns
Returned $354 million to shareholders in 2024, above the high end of capital return guidance.
Insurance in Force Growth
Record insurance in force of $269 billion, supporting approximately 140,000 families in achieving homeownership.
Credit Rating Upgrades
S&P upgraded ratings from BBB+ to A-, and Fitch upgraded ratings from A- to A.
Expense Management
Reduced expenses by 2% excluding restructuring costs, despite inflationary pressures.
Dividend and Share Buybacks
Paid out $28 million in dividends and bought back 2.1 million shares for $74 million in Q4 2024.
Lowlights
Impact of Natural Disasters
New delinquencies increased by 6% due to recent hurricanes, with total delinquencies rising to 23,600.
Decline in GAAP Net Income
GAAP net income for Q4 2024 was $163 million, down from $1.15 per diluted share in Q3 2024.
Persistency Rate Decline
Persistency was 82% in Q4, down one point sequentially and four points year over year.
Primary Delinquency Rate Increase
Primary delinquency rate increased to 2.4% from 2.2% sequentially and 2.1% in Q4 2023.
Company Guidance
During Enact Holdings, Inc.'s fourth-quarter earnings call for fiscal year 2024, several metrics highlighted the company's financial performance and strategic execution. Adjusted operating income reached a record high of $718 million for the year, translating to $4.56 per diluted share, a 9% increase year-over-year. The company achieved an adjusted return on equity of 15% and an adjusted book value of $34.16 per share, marking a 12% annual increase. Enact wrote $51 billion of new insurance, ending the year with an insurance-in-force record of $269 billion, supporting 140,000 families in homeownership. In the fourth quarter, adjusted operating income was $169 million with an adjusted earnings per share of $1.09 and a 13.5% adjusted return on equity. The company's strong balance sheet and strategic capital allocation resulted in a $750 million senior notes issuance and a $354 million capital return to shareholders. Operational efficiencies were evident with a 2% expense reduction, excluding restructuring costs. Additionally, Enact maintained a robust PMIERs sufficiency of 167% or $2.1 billion above requirements, further supported by reinsurance agreements to optimize capital and manage risks effectively.Enact Holdings Corporate Events
Executive/Board ChangesShareholder Meetings
Enact Holdings Appoints H. Elizabeth Mitchell as Director
Positive
Mar 11, 2025
On March 7, 2025, Anne G. Waleski announced her decision not to seek re-election as a director of Enact Holdings, Inc., effective at the company’s 2025 Annual Meeting of Stockholders on May 14, 2025. Her decision was not due to any disagreement with the company. Subsequently, on March 11, 2025, Enact appointed H. Elizabeth Mitchell as a new independent director, temporarily increasing the board size to 12 members until the annual meeting. Ms. Mitchell brings extensive financial and industry experience, having served in various leadership roles across multiple companies. Her appointment is expected to enhance the board’s capabilities and contribute to the company’s growth and shareholder value.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.