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Here's Why One Should Retain Radian Group (RDN) Stock Now
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Radian Group Inc. (RDN - Free Report) has been in investors’ good books on the back of well-performing real estate services and valuation products, asset management and effective capital deployment.
Earnings Surprise History
Radian Group has a decent earnings surprise history. It surpassed estimates in each of the last four quarters, the average being 45.10%.
Zacks Rank & Price Performance
Radian Group currently has a Zacks Rank #3 (Hold). The stock has lost 16.5% compared with the industry’s decline of 5% in the past year.
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 8.4% and expanding 1010 basis points year over year. This reflects efficiency in utilizing shareholders’ funds.
Business Tailwinds
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 (MI) 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 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. Its current dividend yield of 4.3% is better than the industry average of 2.2%. The board had approved a new two-year $400 million share buyback program in February 2022. In the first nine months of 2022, Radian bought back shares worth $400.1 million and another $0.9 million worth in October, exhausting its authorization.
CNO Financial’s earnings surpassed estimates in three of the last four quarters and missed in one, the average beat being 26.02%. In the past year, CNO stock has lost 11.7%.
The Zacks Consensus Estimate for CNO Financial’s 2023 earnings has moved 1.3% north in the past 30 days.
Allianz’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 12.96%. In the past year, the insurer has lost 9%.
The Zacks Consensus Estimate for ALIZY’s 2023 earnings has moved 1.6% north in the past 60 days. The Zacks Consensus Estimate for Allianz’s 2023 earnings per share indicates year-over-year increase of 47.2%.
Horace Mann Educators’ earnings surpassed estimates in three of the last four quarters and missed in one, the average being 28.61%. In the past year, Horace Mann Educators has lost 4.7%.
The Zacks Consensus Estimate for Horace Mann Educators’ 2023 earnings implies a year-over-year rise of 69.3%.
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Here's Why One Should Retain Radian Group (RDN) Stock Now
Radian Group Inc. (RDN - Free Report) has been in investors’ good books on the back of well-performing real estate services and valuation products, asset management and effective capital deployment.
Earnings Surprise History
Radian Group has a decent earnings surprise history. It surpassed estimates in each of the last four quarters, the average being 45.10%.
Zacks Rank & Price Performance
Radian Group currently has a Zacks Rank #3 (Hold). The stock has lost 16.5% compared with the industry’s decline of 5% in the past year.
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 8.4% and expanding 1010 basis points year over year. This reflects efficiency in utilizing shareholders’ funds.
Business Tailwinds
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 (MI) 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 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. Its current dividend yield of 4.3% is better than the industry average of 2.2%. The board had approved a new two-year $400 million share buyback program in February 2022. In the first nine months of 2022, Radian bought back shares worth $400.1 million and another $0.9 million worth in October, exhausting its authorization.
Stocks to Consider
Some better-ranked stocks from the multi- line insurance industry are CNO Financial Group, Inc. (CNO - Free Report) , Allianz SE (ALIZY - Free Report) and Horace Mann Educators Corporation (HMN - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
CNO Financial’s earnings surpassed estimates in three of the last four quarters and missed in one, the average beat being 26.02%. In the past year, CNO stock has lost 11.7%.
The Zacks Consensus Estimate for CNO Financial’s 2023 earnings has moved 1.3% north in the past 30 days.
Allianz’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 12.96%. In the past year, the insurer has lost 9%.
The Zacks Consensus Estimate for ALIZY’s 2023 earnings has moved 1.6% north in the past 60 days. The Zacks Consensus Estimate for Allianz’s 2023 earnings per share indicates year-over-year increase of 47.2%.
Horace Mann Educators’ earnings surpassed estimates in three of the last four quarters and missed in one, the average being 28.61%. In the past year, Horace Mann Educators has lost 4.7%.
The Zacks Consensus Estimate for Horace Mann Educators’ 2023 earnings implies a year-over-year rise of 69.3%.