Enact Holdings Stock Surges on Strong Earnings and Shareholder Returns

Enact Holdings US29249E1091

Shares of mortgage insurer Enact Holdings are reaching new highs, propelled by a robust quarterly performance and an enhanced commitment to returning capital to investors. The stock has gained nearly 9% over the past month and is up 20% year-to-date, signaling strong market confidence.

A primary catalyst for the recent share price appreciation is the company's aggressive capital return program. Management has raised its full-year 2025 capital return forecast to approximately $500 million, a significant increase from the prior expectation of $400 million. This shareholder-friendly approach was demonstrated in the third quarter alone, with $136 million returned through two channels:

• A quarterly dividend of $0.21 per share, totaling $31 million, payable on December 11, 2025.
• Share repurchases amounting to $105 million.

This strategy is designed to provide direct support for earnings per share (EPS) and return on equity (ROE) metrics.

Third-Quarter 2025 Results Exceed Expectations

The financial results for Q3 2025 provided the fundamental underpinning for the rally. Enact reported adjusted operating income of $166 million, or $1.12 per share, comfortably surpassing analyst consensus estimates of $1.08 per share. Key operational metrics showed strength:

• New Insurance Written (NIW): $14 billion, representing a 6% increase from the previous quarter.
• Primary Insurance in Force: Grew to $272 billion.
• PMIERs Sufficiency: Remained robust at 162%, or about $1.9 billion above regulatory requirements.

The quarter was not without a noted headwind, as the loss ratio increased to 15% from 10% in Q2 2025. Operating expenses, however, remained disciplined at $53 million.

Market Risks and Forward Outlook

While the current momentum is strong, Enact's performance remains intrinsically linked to the health of the U.S. housing finance market. Sustained high mortgage interest rates or a softening in home prices could present challenges to the optimistic sentiment. The current average price target for the stock sits around $40.60, suggesting analysts see further potential, provided macroeconomic conditions remain supportive.