Enact Holdings Inc. ACT

The business

Enact Holdings writes private mortgage insurance (PMI), the product that reimburses a lender when a borrower defaults on a residential mortgage made with less than a 20% down payment. The borrower pays the premium, the lender holds the coverage, and Enact earns premium every month on its in-force book until the policy cancels. The engine is the in-force book itself: a roughly $270B portfolio of primary insurance in-force that generates about $1.2B of annual earned premium, and that book is doing essentially all the work, north of 95% of revenue and effectively all of operating profit. There are six US private MI carriers (Enact, MGIC, Radian, Essent, National MI, Arch), a stable oligopoly since the post-2008 reset, with capital rules set by the GSEs through PMIERs (Private Mortgage Insurer Eligibility Requirements). With 421 employees against $674M of net income, this is one of the highest profit-per-head franchises in financials.

The qualitative fact the financials understate is the Genworth ownership overhang. Genworth Financial floated a minority of Enact in September 2021 and still controls the large majority of the shares, steadily monetizing the position through periodic secondaries. Each placement clears at a small discount to the prior close, which is the main driver of price action in the stock, and the absorbing buyer base has rotated toward dedicated PMI and value funds. What changed in the last few quarters is the pace of return of capital: the buyback has run at about $382M a year while the dividend has stepped up at double-digit rates, and the diluted share count has compressed visibly, from 157.6M in FY24 to 149.3M in FY25 to 142.6M in Q1 2026. The implicit signal is that Genworth wants Enact to retire stock ahead of its eventual full exit so the float can absorb the remaining sell-down without crushing the price-to-book multiple.