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Reasons Why Investors Should Hold Radian Group (RDN) Stock
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Radian Group (RDN - Free Report) is well poised for growth, driven by higher monthly premium policies, solid cash position as well as prudent capital deployment.
In the past seven days, the company’s 2021 and 2022 earnings estimates have moved 1.9% and 0.3% north, respectively, reflecting analyst’s optimism surrounding the stock.
Radian’s return on equity was 8.3% in the trailing 12-month period, higher than the industry average of 7.7%. Return on equity is a profitability measure that identifies a company’s efficiency in utilizing its shareholders’ funds.
Mortgage insurance market is one of the largest in the industry and is the primary driver of the company’s earnings. It driven by purchase market. Despite the challenges in 2020, the insurer was able to write record breaking levels of new mortgage insurance business. Mortgage Insurance segment contributes a lion’s share to the company’s net premiums earned.
Increase in insurance in force IIF (primary driver of future premiums), higher monthly premium policies and increase in single premium policy cancellations due to an increase in refinance activity should contribute to the premium growth of the company.
Investment income, one of the key components of revenues, is likely to gain from higher investment yields and average investment balances owing to investing positive cash flow from operations in the near term.
The company boasts a solid balance sheet with high liquidity and improving leverage. Its debt to capital of 26.9% betters the industry average of 29.9%. Radian Group maintained a strong capital position with $1.4 billion of total holding company liquidity. In a bid to boost strategic financial flexibility, it strengthened available liquidity with the extension of existing credit facility term to January of 2022 and also issued $525 million of senior notes due 2025.
The company raised its dividend at a seven-year (2014-2021) CAGR of 80.5% and the company’s current dividend yield stands at 2.2%. These factors make the stock appealing to yield-seeking investors. At present, it has $$198.9 million remaining under the share repurchase authorization.
However, shares of this Zacks Rank #3 (Hold) multi-line insurer have gained 24.3% in a year compared with the industry’s increase of 52.3%.
The Zacks Consensus Estimate for 2021 and 2022 earnings per share is pegged at $2.61 and $2.84, indicating year-over-year increase of 50% and 9%, respectively.
Key Players
Some other better-ranked players in the multi-line insurance industry include Old Republic International Corporation (ORI - Free Report) , James River Group Holdings Ltd. (JRVR - Free Report) and SelectQuote, Inc. (SLQT - Free Report) . While Old Republic International sports a Zacks Rank #1 (Strong Buy), James River Group and SelectQuote carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Old Republic International has a trailing four-quarter earnings surprise of 65.77%, on average.
James River Group surpassed estimates in three of the last four quarters, with the average being 11.63%.
SelectQuote surpassed estimates in three of the last four quarters, with the average being 121.53%.
5G Revolution: 3 Stocks to Make Your Move
With super high data speed, it will make current cell phones obsolete and unlock the full potential of big data, cloud computing, and artificial intelligence. In the next few years this industry is predicted to create 22 million jobs and a stunning $12.3 trillion in revenue.
Today you have an historic chance to pursue almost unimaginable gains like Microsoft, Netflix, and Apple in their early phases. Zacks has released a Special Report that reveals our . . .
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Reasons Why Investors Should Hold Radian Group (RDN) Stock
Radian Group (RDN - Free Report) is well poised for growth, driven by higher monthly premium policies, solid cash position as well as prudent capital deployment.
In the past seven days, the company’s 2021 and 2022 earnings estimates have moved 1.9% and 0.3% north, respectively, reflecting analyst’s optimism surrounding the stock.
Radian’s return on equity was 8.3% in the trailing 12-month period, higher than the industry average of 7.7%. Return on equity is a profitability measure that identifies a company’s efficiency in utilizing its shareholders’ funds.
Mortgage insurance market is one of the largest in the industry and is the primary driver of the company’s earnings. It driven by purchase market. Despite the challenges in 2020, the insurer was able to write record breaking levels of new mortgage insurance business. Mortgage Insurance segment contributes a lion’s share to the company’s net premiums earned.
Increase in insurance in force IIF (primary driver of future premiums), higher monthly premium policies and increase in single premium policy cancellations due to an increase in refinance activity should contribute to the premium growth of the company.
Investment income, one of the key components of revenues, is likely to gain from higher investment yields and average investment balances owing to investing positive cash flow from operations in the near term.
The company boasts a solid balance sheet with high liquidity and improving leverage. Its debt to capital of 26.9% betters the industry average of 29.9%. Radian Group maintained a strong capital position with $1.4 billion of total holding company liquidity. In a bid to boost strategic financial flexibility, it strengthened available liquidity with the extension of existing credit facility term to January of 2022 and also issued $525 million of senior notes due 2025.
The company raised its dividend at a seven-year (2014-2021) CAGR of 80.5% and the company’s current dividend yield stands at 2.2%. These factors make the stock appealing to yield-seeking investors. At present, it has $$198.9 million remaining under the share repurchase authorization.
However, shares of this Zacks Rank #3 (Hold) multi-line insurer have gained 24.3% in a year compared with the industry’s increase of 52.3%.
The Zacks Consensus Estimate for 2021 and 2022 earnings per share is pegged at $2.61 and $2.84, indicating year-over-year increase of 50% and 9%, respectively.
Key Players
Some other better-ranked players in the multi-line insurance industry include Old Republic International Corporation (ORI - Free Report) , James River Group Holdings Ltd. (JRVR - Free Report) and SelectQuote, Inc. (SLQT - Free Report) . While Old Republic International sports a Zacks Rank #1 (Strong Buy), James River Group and SelectQuote carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Old Republic International has a trailing four-quarter earnings surprise of 65.77%, on average.
James River Group surpassed estimates in three of the last four quarters, with the average being 11.63%.
SelectQuote surpassed estimates in three of the last four quarters, with the average being 121.53%.
5G Revolution: 3 Stocks to Make Your Move
With super high data speed, it will make current cell phones obsolete and unlock the full potential of big data, cloud computing, and artificial intelligence. In the next few years this industry is predicted to create 22 million jobs and a stunning $12.3 trillion in revenue.
Today you have an historic chance to pursue almost unimaginable gains like Microsoft, Netflix, and Apple in their early phases. Zacks has released a Special Report that reveals our . . .
Download now. Today the report is FREE >>