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Interested In Essent Group Ltd. (NYSE:ESNT)? Here's What Its Recent Performance Looks Like

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Measuring Essent Group Ltd.'s (NYSE:ESNT) track record of past performance is a useful exercise for investors. It enables us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess ESNT's recent performance announced on 31 December 2018 and weigh these figures against its long-term trend and industry movements.

Check out our latest analysis for Essent Group

Could ESNT beat the long-term trend and outperform its industry?

ESNT's trailing twelve-month earnings (from 31 December 2018) of US$467m has jumped 23% compared to the previous year.

However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 46%, indicating the rate at which ESNT is growing has slowed down. What could be happening here? Well, let’s take a look at what’s going on with margins and whether the rest of the industry is feeling the heat.

NYSE:ESNT Income Statement, May 1st 2019

In terms of returns from investment, Essent Group has fallen short of achieving a 20% return on equity (ROE), recording 20% instead. However, its return on assets (ROA) of 15% exceeds the US Mortgage industry of 0.8%, indicating Essent Group has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Essent Group’s debt level, has increased over the past 3 years from 19% to 20%.

What does this mean?

While past data is useful, it doesn’t tell the whole story. Companies that have performed well in the past, such as Essent Group gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research Essent Group to get a better picture of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for ESNT’s future growth? Take a look at our free research report of analyst consensus for ESNT’s outlook.
  2. Financial Health: Are ESNT’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

NB: Figures in this article are calculated using data from the trailing twelve months from 31 December 2018. This may not be consistent with full year annual report figures.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.