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Here's Why You Should Add Radian Group (RDN) to Your Kitty
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Radian GroupInc. (RDN - Free Report) has been in investors’ good books on the back of higher persistency, strong-performing real estate services, asset management, valuation products and sufficient liquidity.
Earnings Surprise History
Radian Group has a decent earnings surprise history. It beat estimates in each of the last four quarters, the average beat being 45.10%.
Zacks Rank & Price Performance
Radian Group currently has a Zacks Rank #2 (Buy). In the past year, the stock has lost 11.2% compared with the industry’s decrease of 4.9%.
Image Source: Zacks Investment Research
Return on Equity
RDN’s return on equity for the trailing 12 months is 22.7%, better than the industry average of 8.3% and expanding 1010 basis points year over year. This reflects efficiency in utilizing shareholders’ funds.
Style Score
Radian Group has a favorable VGM Score of B. VGM Score helps identify stocks with the most attractive value, the best growth and the most promising momentum.
Back-tested results show that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2 offer the best investment opportunities.
Business Tailwinds
The Zacks Consensus Estimate for RDN’s 2022 earnings per share is pegged at $4.71, indicating a year-over-year increase of 49.5%. The Zacks Consensus Estimate for 2022 has moved north by 12.7% in the past 30 days, reflecting analyst optimism.
Radian’s homegenius business segment should continue to benefit from strong-performing real estate services, asset management, and valuation products and services despite minimal foreclosure and real estate-owned activities.
Continued high levels of the new mortgage insurance business, as well as an increase in persistency, are likely to drive the primary insurance in force, the main driver of future earnings for Radian Group.
For 2022, Radian estimates total mortgage originations to be nearly $3 trillion, reflecting an 8% increase in purchase originations and a 58% decrease in refinance activity. This growth in the purchase market is a positive for the mortgage insurance industry.
Based on the most recent origination projections for 2022, Radian expects the private mortgage insurance (MI) market to be approximately $400 billion to $450 billion, which would represent the third-largest MI volume year in history.
Radian Group’s solid liquidity aids in effective capital deployment. Radian declared a 43% increase in quarterly dividend in the first quarter of 2022 that translates into the highest dividend yield in the private MI industry. Its current dividend yield of 4.2% is better than the industry average of 2.3%.
Radian Group also has an impressive Value Score of A. The insurer currently has a trailing 12-month Price/Book ratio of 0.83, lower than the industry range of 2.82.
MGIC Investment’s earnings surpassed estimates in each of the last four quarters, the average beat being 36.34%. In the past year, MTG has declined 11.5%.
The Zacks Consensus Estimate for MTG’s 2022 and 2023 earnings has moved 5.9% and 0.4% north, respectively, in the past 30 days.
Berkshire Hathaway delivered a four-quarter average earnings surprise of 22.18%. In the past year, Berkshire Hathaway has gained 10%.
The Zacks Consensus Estimate for BRK.B’s 2022 and 2023 earnings implies a respective increase of 15% and 6.2% from the year-ago reported number.
American Financial’s earnings surpassed estimates in each of the last four quarters, the average beat being 28.16%. In the past year, American Financial has lost 2.2%.
The Zacks Consensus Estimate for AFG’s 2022 and 2023 earnings has moved 0.6% and 1.8% north, respectively, in the past seven days.
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Here's Why You Should Add Radian Group (RDN) to Your Kitty
Radian Group Inc. (RDN - Free Report) has been in investors’ good books on the back of higher persistency, strong-performing real estate services, asset management, valuation products and sufficient liquidity.
Earnings Surprise History
Radian Group has a decent earnings surprise history. It beat estimates in each of the last four quarters, the average beat being 45.10%.
Zacks Rank & Price Performance
Radian Group currently has a Zacks Rank #2 (Buy). In the past year, the stock has lost 11.2% compared with the industry’s decrease of 4.9%.
Image Source: Zacks Investment Research
Return on Equity
RDN’s return on equity for the trailing 12 months is 22.7%, better than the industry average of 8.3% and expanding 1010 basis points year over year. This reflects efficiency in utilizing shareholders’ funds.
Style Score
Radian Group has a favorable VGM Score of B. VGM Score helps identify stocks with the most attractive value, the best growth and the most promising momentum.
Back-tested results show that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2 offer the best investment opportunities.
Business Tailwinds
The Zacks Consensus Estimate for RDN’s 2022 earnings per share is pegged at $4.71, indicating a year-over-year increase of 49.5%. The Zacks Consensus Estimate for 2022 has moved north by 12.7% in the past 30 days, reflecting analyst optimism.
Radian’s homegenius business segment should continue to benefit from strong-performing real estate services, asset management, and valuation products and services despite minimal foreclosure and real estate-owned activities.
Continued high levels of the new mortgage insurance business, as well as an increase in persistency, are likely to drive the primary insurance in force, the main driver of future earnings for Radian Group.
For 2022, Radian estimates total mortgage originations to be nearly $3 trillion, reflecting an 8% increase in purchase originations and a 58% decrease in refinance activity. This growth in the purchase market is a positive for the mortgage insurance industry.
Based on the most recent origination projections for 2022, Radian expects the private mortgage insurance (MI) market to be approximately $400 billion to $450 billion, which would represent the third-largest MI volume year in history.
Radian Group’s solid liquidity aids in effective capital deployment. Radian declared a 43% increase in quarterly dividend in the first quarter of 2022 that translates into the highest dividend yield in the private MI industry. Its current dividend yield of 4.2% is better than the industry average of 2.3%.
Radian Group also has an impressive Value Score of A. The insurer currently has a trailing 12-month Price/Book ratio of 0.83, lower than the industry range of 2.82.
Other Stocks to Consider
Some other top-ranked stocks from the insurance industry are MGIC Investment Corporation (MTG - Free Report) Berkshire Hathaway (BRK.B - Free Report) and American Financial Group, Inc. (AFG - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
MGIC Investment’s earnings surpassed estimates in each of the last four quarters, the average beat being 36.34%. In the past year, MTG has declined 11.5%.
The Zacks Consensus Estimate for MTG’s 2022 and 2023 earnings has moved 5.9% and 0.4% north, respectively, in the past 30 days.
Berkshire Hathaway delivered a four-quarter average earnings surprise of 22.18%. In the past year, Berkshire Hathaway has gained 10%.
The Zacks Consensus Estimate for BRK.B’s 2022 and 2023 earnings implies a respective increase of 15% and 6.2% from the year-ago reported number.
American Financial’s earnings surpassed estimates in each of the last four quarters, the average beat being 28.16%. In the past year, American Financial has lost 2.2%.
The Zacks Consensus Estimate for AFG’s 2022 and 2023 earnings has moved 0.6% and 1.8% north, respectively, in the past seven days.