Radian Group Inc. ( RDN Quick Quote RDN - Free Report) recently unveiled a new unit, Radian Mortgage Capital LLC (RMC), which is expected to render residential mortgage lenders a further secondary-market option for high-quality loans. This new unit is also likely to provide mortgage investors with a high-quality sponsor. RMC is likely to enhance the competencies of Radian to participate in the mortgage market to manage and distribute residential mortgage credit risk. The newly introduced RMC will provide RDN with an opportunity to expand its market reach and boost its relationships across the mortgage ecosystem with mortgage lenders and investors. RMC intends to use Radian’s lender relationships to distribute high-quality residential mortgage loans in the capital markets through private label securitizations and direct sales to mortgage investors. This will have the option to retain and manage structured components of the underlying credit risk where the company sees value. This will provide additional secondary market options to mortgage insurance customers. RDN boasts a diversified mortgage and real estate business, which provides credit-related mortgage insurance coverage. The Mortgage segment of Radian distributes U.S. mortgage credit risk on behalf of mortgage lending institutions and mortgage credit investors, principally through private mortgage insurance on residential first-lien mortgage loans. In addition to providing private mortgage insurance, the insurer participates in credit risk transfer programs as part of its initiative to distribute mortgage credit risk and enhance the role of private capital in the mortgage market. Radian remains focused on improving its mortgage insurance portfolio to drive long-term earnings growth. The title insurer thus remains poised to benefit from the launch as it will get the opportunity to expand the products it delivers to lenders through RMC. Radian presently estimates the private mortgage insurance market to be worth approximately $500 billion to $525 billion for 2022, which will represent the third-largest MI volume year in history. Price Performace
Shares of this Zacks Rank #3 (Hold) insurer have lost 7.5% in a year’s time, compared with the
industry's decrease of 14.4%. Image Source: Zacks Investment Research Stocks to Consider
Some better-ranked stocks from the insurance industry are
United Fire Group, Inc. ( UFCS Quick Quote UFCS - Free Report) , Zurich Insurance Group Ltd. ( ZURVY Quick Quote ZURVY - Free Report) and Fidelity National Financial, Inc. ( FNF Quick Quote FNF - Free Report) . While United Fire sports a Zacks Rank #1 (Strong Buy), Zurich Insurance and Fidelity National carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. United Fire’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 270.8%. In the past year, UFCS' stock has gained 37.2%. The Zacks Consensus Estimate for UFCS’ 2022 earnings has moved 23.5% north in the past 60 days. The Zacks Consensus Estimate for Zurich Insurance’s 2022 and 2023 earnings has moved 3% and 5.1% north, respectively, in the past 60 days. In the past year, the ZURVY stock has rallied 6.8%. The Zacks Consensus Estimate for Zurich Insurance’s 2022 and 2023 earnings implies 7.5% and 9.6 year-over-year growth, respectively. Fidelity National’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 27.6%. In the past year, FNF stock has lost 14.8%. The Zacks Consensus Estimate for Fidelity National’s 2022 and 2023 earnings has moved 0.3% and 0.5% north, respectively, in the past 60 days.