Skyward Specialty Insurance Group (NASDAQ:SKWD) and NMI (NASDAQ:NMIH) Critical Analysis

NMI (NASDAQ:NMIH) and Skyward Specialty Insurance Group (NASDAQ:SKWD) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, institutional ownership, earnings, analyst recommendations, risk, dividends and valuation.

Insider & Institutional Ownership

94.1% of NMI shares are owned by institutional investors. Comparatively, 94.8% of Skyward Specialty Insurance Group shares are owned by institutional investors. 3.0% of NMI shares are owned by company insiders. Comparatively, 7.9% of Skyward Specialty Insurance Group shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Volatility & Risk

NMI has a beta of 0.66, meaning that its stock price is 34% less volatile than the S&P 500. Comparatively, Skyward Specialty Insurance Group has a beta of 0.55, meaning that its stock price is 45% less volatile than the S&P 500.

Profitability

This table compares NMI and Skyward Specialty Insurance Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NMI	55.02%	16.08%	10.79%
Skyward Specialty Insurance Group	10.57%	17.30%	3.63%

Earnings and Valuation

This table compares NMI and Skyward Specialty Insurance Group”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NMI	$650.97 million	4.73	$360.11 million	$4.78	8.38
Skyward Specialty Insurance Group	$1.15 billion	1.73	$118.83 million	$3.39	14.49

NMI has higher earnings, but lower revenue than Skyward Specialty Insurance Group. NMI is trading at a lower price-to-earnings ratio than Skyward Specialty Insurance Group, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings and target prices for NMI and Skyward Specialty Insurance Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NMI	0	3	3	0	2.50
Skyward Specialty Insurance Group	0	3	10	1	2.86

NMI presently has a consensus target price of $41.20, suggesting a potential upside of 2.82%. Skyward Specialty Insurance Group has a consensus target price of $64.27, suggesting a potential upside of 30.88%. Given Skyward Specialty Insurance Group’s stronger consensus rating and higher possible upside, analysts plainly believe Skyward Specialty Insurance Group is more favorable than NMI.

Summary

Skyward Specialty Insurance Group beats NMI on 9 of the 15 factors compared between the two stocks.

About NMI

NMI Holdings, Inc. provides private mortgage guaranty insurance services in the United States. The company offers mortgage insurance services, such as primary and pool insurance; and outsourced loan review services to mortgage loan originators. It serves national and regional mortgage banks, money center banks, credit unions, community banks, builder-owned mortgage lenders, internet-sourced lenders, and other non-bank lenders. The company was incorporated in 2011 and is headquartered in Emeryville, California.

About Skyward Specialty Insurance Group

Skyward Specialty Insurance Group, Inc., an insurance holding company, underwrites commercial property and casualty insurance products in the United States. It offers general liability, excess liability, professional liability, commercial auto, group accident and health, property, surety, and workers' compensation insurance products. Skyward Specialty Insurance Group, Inc. was incorporated in 2006 and is headquartered in Houston, Texas.