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Here's Why You Should Hold Radian Group (RDN) in Your Portfolio
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Radian Group (RDN - Free Report) has been in investors’ good books on the back of its strong home purchase market, higher premium policies, increase in single premium policy cancellations and effective capital deployment
Growth Projections
The Zacks Consensus Estimate for 2021 and 2022 earnings per share is pegged at $2.71 and $3.02, indicating year-over-year increase of 55.7% and 11.4%, respectively.
Zacks Rank & Price Performance
Radian Group currently carries a Zacks Rank #3 (Hold). In the past year, the stock has rallied 47% compared with the industry’s increase of 50.3%.
Business Tailwinds
The company continues to maximize the economic value and future earnings of mortgage insurance portfolio. The economic value and the projected future earnings of this portfolio include the addition of high-quality 2020 and 2021 vintages, which represented 47% of insurance in force as of Mar 31, 2021. These vintages are likely to contribute significant earnings in the future periods as the portfolio continues to generate attractive returns.
Improving macroeconomic conditions and strong home purchase market fueled by first-time homebuyers drive the growth in the value of in-force portfolio in the long run.
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.
In the first quarter of 2021, Radian Group witnessed continuous improvement in the credit performance of portfolio as reflected by declining number of new defaults. This momentum is expected to continue on improving economic environment, support of homeowners continuing forbearance program and foreclosure moratoriums as well as strong and healthy housing market.
Radian noted per the recent market projections for 2021, total mortgage originations are estimated to be approximately $3.5 trillion. Radian noted per the most recent origination projections, the private mortgage insurance market is anticipated to be approximately $550 billion to $600 billion. It is set to be the second highest MI volume year in history.
Radian Group maintains a solid balance sheet with sufficient liquidity of $1.3 billion, which includes the company's $267.5 million unsecured revolving credit facility.
In May 2021, its board of directors hiked its quarterly cash dividend by 12%. Its current dividend yield of 2.4% is higher than the industry average of 2%.
By virtue of positive momentum in the housing market and favorable credit trends within portfolio, it has resumed share repurchase program. The company has $190.2 million remaining under its share authorization at first-quarter end.
Stocks to Consider
Some better-ranked insurance stocks from the insurance sector are HCI Group, Inc. (HCI - Free Report) , Old Republic International Corporation (ORI - Free Report) and Alleghany Corporation . While HCI Group sports a Zacks Rank #1 (Strong Buy), Old Republic International and Alleghany carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The bottom line of HCI Group surpassed estimates in three of the last four quarters and missed in the other one, the average being 42.91%.
Old Republic International surpassed estimates in each of the last four quarters, with the average surprise being 53.01%.
Alleghany’s earnings surpassed estimates in each of the last four quarters, the average being 128.63%.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
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Here's Why You Should Hold Radian Group (RDN) in Your Portfolio
Radian Group (RDN - Free Report) has been in investors’ good books on the back of its strong home purchase market, higher premium policies, increase in single premium policy cancellations and effective capital deployment
Growth Projections
The Zacks Consensus Estimate for 2021 and 2022 earnings per share is pegged at $2.71 and $3.02, indicating year-over-year increase of 55.7% and 11.4%, respectively.
Zacks Rank & Price Performance
Radian Group currently carries a Zacks Rank #3 (Hold). In the past year, the stock has rallied 47% compared with the industry’s increase of 50.3%.
Business Tailwinds
The company continues to maximize the economic value and future earnings of mortgage insurance portfolio. The economic value and the projected future earnings of this portfolio include the addition of high-quality 2020 and 2021 vintages, which represented 47% of insurance in force as of Mar 31, 2021.
These vintages are likely to contribute significant earnings in the future periods as the portfolio continues to generate attractive returns.
Improving macroeconomic conditions and strong home purchase market fueled by first-time homebuyers drive the growth in the value of in-force portfolio in the long run.
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.
In the first quarter of 2021, Radian Group witnessed continuous improvement in the credit performance of portfolio as reflected by declining number of new defaults. This momentum is expected to continue on improving economic environment, support of homeowners continuing forbearance program and foreclosure moratoriums as well as strong and healthy housing market.
Radian noted per the recent market projections for 2021, total mortgage originations are estimated to be approximately $3.5 trillion. Radian noted per the most recent origination projections, the private mortgage insurance market is anticipated to be approximately $550 billion to $600 billion. It is set to be the second highest MI volume year in history.
Radian Group maintains a solid balance sheet with sufficient liquidity of $1.3 billion, which includes the company's $267.5 million unsecured revolving credit facility.
In May 2021, its board of directors hiked its quarterly cash dividend by 12%. Its current dividend yield of 2.4% is higher than the industry average of 2%.
By virtue of positive momentum in the housing market and favorable credit trends within portfolio, it has resumed share repurchase program. The company has $190.2 million remaining under its share authorization at first-quarter end.
Stocks to Consider
Some better-ranked insurance stocks from the insurance sector are HCI Group, Inc. (HCI - Free Report) , Old Republic International Corporation (ORI - Free Report) and Alleghany Corporation . While HCI Group sports a Zacks Rank #1 (Strong Buy), Old Republic International and Alleghany carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The bottom line of HCI Group surpassed estimates in three of the last four quarters and missed in the other one, the average being 42.91%.
Old Republic International surpassed estimates in each of the last four quarters, with the average surprise being 53.01%.
Alleghany’s earnings surpassed estimates in each of the last four quarters, the average being 128.63%.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
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