The board of directors of Radian Group Inc. (RDN - Free Report) recently authorized a share buyback program to return more value to investors. The latest authorization will allow the company to spend up to $200 million to repurchase its common stock.
The company’s previous share repurchase program of $250 million (raised by $150 million on Mar 29, 2019) has been fully utilized and the same expired on Jul 23, 2019. The new buyback authorization will expire on Jul 31, 2020, and is effective immediately.
In the first half of 2019, the company bought back about 9 million shares for $197.6 million and another 2.2 million shares for $52.5 million in July. Radian Group bought back about 11.3 million shares, or 5.3% of the shares outstanding at the beginning of the program.
The Zacks Rank #2 (Buy) insurer remains committed toward boosting shareholder value through such share repurchases and dividend payouts. A solid financial position, backed by strong core operations and favorable operating environment, enables the company to generate enough capital. Cash flow from operations improved 12.4% in the first half of 2019. The company has a sturdy track of delivering positive surprise in the last nine quarters.
Hence, we remain optimistic about Radian Group’s efforts in further improving its capital as well as liquidity position that will not only allow the company to return more value to investors but also accelerate the company’s near-term growth.
Moreover, Radian Group remains focused on its moves toward efficient and prudent capital deployment. This balanced approach supports the company’s diversified and integrated businesses, thus meeting its client needs and creating a long-term shareholder value.
Share repurchases benefit the company’s earnings per share, book value as well as its shareholder equity by reducing shares outstanding.
Concurrently, the board of directors of the insurer has approved 0.25 cents per share, payable Sep 6, 2019, to shareholders of record as of Aug 26, 2019. The company’s current dividend yield is 0.05%. For the last decade, this insurer has been consistently paying dividends and buying back shares. Such steadfast endeavors spread a bullish sentiment around the stock, making it an attractive pick for yield-seeking investors.
Shares of Radian Group have rallied 36.6%, year to date, outperforming the industry’s increase of 3.9%. We expect improving mortgage insurance in force, declining claim payments and a robust capital position to further drive the company’s shares in the near run.
Other Stocks to Consider
Investors interested in other top-ranked stocks from the insurance industry can also consider James River Group Holdings, Ltd. (JRVR - Free Report) , Assurant, Inc. (AIZ - Free Report) and Cigna Corporation (CI - Free Report) .
James River Group provides specialty insurance and reinsurance services in the United States. The company delivered a positive surprise of 3.13% in the last reported quarter. The stock sports a Zacks Rank #1 (Strong Buy), currently. You can see the complete list of today’s Zacks #1 Rank stocks here.
Assurant provides risk management solutions for housing and lifestyle markets in North America, Latin America, Europe, and the Asia Pacific. The company delivered a 9.86% positive surprise in the last reported quarter. The stock carries a Zacks Rank #2, at present.
Cigna provides insurance and related products and services in the United States and internationally. The company delivered a positive surprise of 15.28% in the last reported quarter. The stock currently carries a Zacks Rank #2.
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