We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Radian Group (RDN) Up 39.8% in a Year: More Room for Growth?
Read MoreHide Full Article
Radian Group, Inc.'s (RDN - Free Report) shares have risen 39.8% in the past year compared with the industry's 0.7% growth. The Finance sector has grown 8.9% and the Zacks S&P 500 index has gained 16.5% in the said time frame. With a market capitalization of $4 billion, the average volume of shares traded in the last three months totaled 1.1 million.
Image Source: Zacks Investment Research
The rally was largely driven by improved persistency and mortgage insurance portfolio, robust capital position as well as prudent capital deployment.
The multi-line insurer has a solid track record of beating on earnings in each of the last four quarters, delivering an average surprise of 25.26%.
Radian Group’s return on equity for the trailing 12 months is 15.6%, better than the industry average of 13.2%. This reflects its efficiency in utilizing shareholders’ funds.
Can It Retain the Momentum?
The Zacks Consensus Estimate for RDN’s 2023 earnings has moved 4.2% north in the past 30 days, reflecting analysts’ optimism about the stock.
Radian’s earnings are poised to grow on the strength of its mortgage insurance portfolio. The primary mortgage insurance in force should benefit from an increase in single premium policy insurance in force and a higher monthly premium policy. Notably, in terms of the housing market and based on industry projections for the total mortgage originations of $1.6 trillion, RDN expects the private mortgage insurance market in 2023 to be around $300 billion.
Persistency rate is poised to show improvement, given lower refinance activity, due to an increase in mortgage interest rates. Its business restructuring moves are focused on the core business and services with higher growth potential, ensuring a predictable and recurring fee-based revenue stream.
This Zacks Rank #3 (Hold) insurer has been witnessing declining claims over the past few years. Given the strong credit characteristics of the new loans insured, we expect the company to witness a lesser number of claims, favoring profitability.
However, Radian Group’s homegenius title and real estate businesses are affected by a decrease in industry-wide mortgage and real estate transaction volume, inflationary pressures and a higher interest rate environment. Nonetheless, with the continuing focus on disciplined cost management, the insurer remains hopeful about managing the homegenius business through this challenging environment.
Banking on operational excellence, this mortgage insurer maintains a solid balance sheet with sufficient liquidity and strong cash flows.
Solid liquidity favors effective capital deployment. RDN has increased dividends for four straight years and boasts the highest dividend yield in the private MI industry. Its current dividend yield of 3.5% is better than the industry average of 2.6%. The company has $230 million remaining under its buyback authorization.
Assurant’s earnings surpassed estimates in each of the last four quarters, delivering an average surprise of 42.38%.
The Zacks Consensus Estimate for AIZ’s 2023 and 2024 earnings implies 30.8% and 3.6% growth, respectively, on a year-over-year basis. In the past year, the insurer has gained 32.8%.
Everest Group’s earnings surpassed estimates in three of the last four quarters and missed in one, delivering an average surprise of 24.50%.
The Zacks Consensus Estimate for EG’s 2023 and 2024 earnings implies 105.32% and 10.98% growth, respectively, on a year-over-year basis. In the past year, the insurer has gained 19.3%.
Goosehead Insurance’s earnings surpassed estimates in three of the last four quarters and missed in one, delivering an average surprise of 100.43%.
The Zacks Consensus Estimate for GSHD’s 2023 and 2024 earnings implies 150.9% and 28.2% growth, respectively, on a year-over-year basis. In the past year, the insurer has gained 83.7%.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Radian Group (RDN) Up 39.8% in a Year: More Room for Growth?
Radian Group, Inc.'s (RDN - Free Report) shares have risen 39.8% in the past year compared with the industry's 0.7% growth. The Finance sector has grown 8.9% and the Zacks S&P 500 index has gained 16.5% in the said time frame. With a market capitalization of $4 billion, the average volume of shares traded in the last three months totaled 1.1 million.
Image Source: Zacks Investment Research
The rally was largely driven by improved persistency and mortgage insurance portfolio, robust capital position as well as prudent capital deployment.
The multi-line insurer has a solid track record of beating on earnings in each of the last four quarters, delivering an average surprise of 25.26%.
Radian Group’s return on equity for the trailing 12 months is 15.6%, better than the industry average of 13.2%. This reflects its efficiency in utilizing shareholders’ funds.
Can It Retain the Momentum?
The Zacks Consensus Estimate for RDN’s 2023 earnings has moved 4.2% north in the past 30 days, reflecting analysts’ optimism about the stock.
Radian’s earnings are poised to grow on the strength of its mortgage insurance portfolio. The primary mortgage insurance in force should benefit from an increase in single premium policy insurance in force and a higher monthly premium policy. Notably, in terms of the housing market and based on industry projections for the total mortgage originations of $1.6 trillion, RDN expects the private mortgage insurance market in 2023 to be around $300 billion.
Persistency rate is poised to show improvement, given lower refinance activity, due to an increase in mortgage interest rates. Its business restructuring moves are focused on the core business and services with higher growth potential, ensuring a predictable and recurring fee-based revenue stream.
This Zacks Rank #3 (Hold) insurer has been witnessing declining claims over the past few years. Given the strong credit characteristics of the new loans insured, we expect the company to witness a lesser number of claims, favoring profitability.
However, Radian Group’s homegenius title and real estate businesses are affected by a decrease in industry-wide mortgage and real estate transaction volume, inflationary pressures and a higher interest rate environment. Nonetheless, with the continuing focus on disciplined cost management, the insurer remains hopeful about managing the homegenius business through this challenging environment.
Banking on operational excellence, this mortgage insurer maintains a solid balance sheet with sufficient liquidity and strong cash flows.
Solid liquidity favors effective capital deployment. RDN has increased dividends for four straight years and boasts the highest dividend yield in the private MI industry. Its current dividend yield of 3.5% is better than the industry average of 2.6%. The company has $230 million remaining under its buyback authorization.
Stocks to Consider
Some better-ranked stocks from the multi-line insurance industry are Assurant, Inc. (AIZ - Free Report) , Everest Group, Ltd. (EG - Free Report) and Goosehead Insurance (GSHD - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Assurant’s earnings surpassed estimates in each of the last four quarters, delivering an average surprise of 42.38%.
The Zacks Consensus Estimate for AIZ’s 2023 and 2024 earnings implies 30.8% and 3.6% growth, respectively, on a year-over-year basis. In the past year, the insurer has gained 32.8%.
Everest Group’s earnings surpassed estimates in three of the last four quarters and missed in one, delivering an average surprise of 24.50%.
The Zacks Consensus Estimate for EG’s 2023 and 2024 earnings implies 105.32% and 10.98% growth, respectively, on a year-over-year basis. In the past year, the insurer has gained 19.3%.
Goosehead Insurance’s earnings surpassed estimates in three of the last four quarters and missed in one, delivering an average surprise of 100.43%.
The Zacks Consensus Estimate for GSHD’s 2023 and 2024 earnings implies 150.9% and 28.2% growth, respectively, on a year-over-year basis. In the past year, the insurer has gained 83.7%.