Enact Holdings Inc. Common Stock (ACT)
StalwartFairStock Score: 77/100 — HIGH CONVICTION
Key Financials
| Current Price | $43.02 |
| Market Cap | $6.2B |
| P/E Ratio | 9.31 |
| ROE | 12.93% |
| Dividend Yield | 2.08% |
| Sector | Financial Services |
Strengths
- Generates $1.1 billion in annual free cash flow (18.0% yield on market cap)
- Strong Piotroski F-Score of 7/9 indicating robust financial health across profitability, leverage, and efficiency metrics
- Solid return on equity of 13.0% above cost of capital
- Conservative balance sheet with debt-to-equity of just 0.14, providing financial flexibility
- Healthy net profit margin of 14.3% showing consistent profitability
AI Analysis
Enact Holdings Inc. Common Stock is a small-cap financial services company valued at $6.2 billion. The business generates $1.2 billion in annual revenue with a 14.3% net margin and $1.1 billion in free cash flow. From a quality standpoint, Enact shows solid Piotroski F-Score of 7/9 and healthy Altman Z-Score of 3.2. On valuation, the stock is deeply undervalued on a P/E basis at 9.7x, with a modest 29% margin of safety vs Graham Number. Growth dynamics show revenue growing at 3.6% and profit growth of 8.9%. The 1.9% dividend yield adds an income component for patient holders. Our composite FairStock Score of 77/100 reflects strong fundamentals overall. This combination of reasonable valuation, solid returns, and conservative leverage makes it worth a closer look for value-oriented portfolios.
Bull Case
The market underappreciates Enact's consistent 13% ROE at just 10x earnings—a re-rating toward sector peers could unlock 30-50% upside. With $1.1 billion in annual free cash flow (18.0% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.
Bear Case
Macro headwinds or sector-specific disruption could pressure margins, particularly if competitive intensity increases in the financial services space. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.
Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer