Fidelity National Financial (NYSE: FNFV) and NMI Holdings (NASDAQ:NMIH) are both small-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, profitability, valuation, analyst recommendations, institutional ownership, earnings and risk.
Analyst Recommendations
This is a breakdown of current recommendations for Fidelity National Financial and NMI Holdings, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Fidelity National Financial | 0 | 1 | 0 | 0 | 2.00 |
| NMI Holdings | 0 | 2 | 3 | 0 | 2.60 |
Fidelity National Financial currently has a consensus price target of $16.00, suggesting a potential downside of 4.76%. NMI Holdings has a consensus price target of $13.20, suggesting a potential upside of 13.79%. Given NMI Holdings’ stronger consensus rating and higher probable upside, analysts plainly believe NMI Holdings is more favorable than Fidelity National Financial.
Valuation and Earnings
This table compares Fidelity National Financial and NMI Holdings’ revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| Fidelity National Financial | $1.32 billion | 0.83 | $34.00 million | $1.59 | 10.57 |
| NMI Holdings | $151.40 million | 4.59 | $53.06 million | $1.30 | 8.92 |
NMI Holdings has higher revenue, but lower earnings than Fidelity National Financial. NMI Holdings is trading at a lower price-to-earnings ratio than Fidelity National Financial, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Fidelity National Financial has a beta of 0.79, indicating that its share price is 21% less volatile than the S&P 500. Comparatively, NMI Holdings has a beta of 0.64, indicating that its share price is 36% less volatile than the S&P 500.
Profitability
This table compares Fidelity National Financial and NMI Holdings’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Fidelity National Financial | 6.75% | 1.73% | 0.83% |
| NMI Holdings | 52.34% | 5.95% | 3.36% |
Institutional & Insider Ownership
84.2% of Fidelity National Financial shares are owned by institutional investors. Comparatively, 80.6% of NMI Holdings shares are owned by institutional investors. 5.4% of Fidelity National Financial shares are owned by company insiders. Comparatively, 5.4% of NMI Holdings shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Summary
NMI Holdings beats Fidelity National Financial on 8 of the 13 factors compared between the two stocks.
Fidelity National Financial Company Profile
Fidelity National Financial, Inc. (FNF) is a holding company. The Company is a provider of title insurance, technology and transaction services to the real estate and mortgage industries. The Company’s segments include Title, Black Knight, FNF Core Corporate and Other, Restaurant Group, and FNFV Corporate and Other. Its business is organized into groups, including FNF Group and FNF Ventures (FNFV). The Company offers title insurance through its title insurance underwriters: Fidelity National Title Insurance Company, Chicago Title Insurance Company, Commonwealth Land Title Insurance Company, Alamo Title Insurance and National Title Insurance of New York Inc., which collectively issue title insurance policies. FNF Group also provides mortgage technology solutions, including MSP, a residential mortgage servicing technology platform in the United States, through its subsidiary, Black Knight Financial Services, Inc. (Black Knight).
NMI Holdings Company Profile
NMI Holdings, Inc. (NMIH) provides private mortgage guaranty insurance through its insurance subsidiaries. The Company’s primary insurance subsidiary, National Mortgage Insurance Corporation (NMIC), is a mortgage insurance (MI) provider on loans purchased by the Government-sponsored enterprises (GSEs). Its reinsurance subsidiary, National Mortgage Reinsurance Inc One (Re One), provides reinsurance to NMIC on certain loans insured by NMIC. NMIH’s subsidiary, NMI Services, Inc. (NMIS), provides outsourced loan review services to mortgage loan originators. Its Primary mortgage insurance provides mortgage default protection on individual loans at specified coverage percentages. Primary insurance may be written on a flow basis, in which loans are insured as loan originations occur in individual, loan-by-loan transactions, or an aggregated basis, in which each loan in a portfolio of loans is individually insured in a single transaction, typically after the loans have been originated.
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