RADIAN GROUP INC (RDN) Stock Fundamental Analysis
NYSE:RDN - New York Stock Exchange, Inc. - US7502361014 - Common Stock - Currency: USD
Overall RDN gets a fundamental rating of 5 out of 10. We evaluated RDN against 99 industry peers in the Financial Services industry. Both the profitability and the financial health of RDN get a neutral evaluation. Nothing too spectacular is happening here. RDN has a valuation in line with the averages, but it does not seem to be growing. RDN also has an excellent dividend rating. With these ratings, RDN could be worth investigating further for dividend investing!.
1. Profitability
1.1 Basic Checks
In the past year RDN was profitable.
In the past year RDN has reported a negative cash flow from operations.
Each year in the past 5 years RDN has been profitable.
Of the past 5 years RDN 4 years had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 6.81%, RDN belongs to the top of the industry, outperforming 82.83% of the companies in the same industry.
With a decent Return On Equity value of 13.01%, RDN is doing good in the industry, outperforming 67.68% of the companies in the same industry.
With a decent Return On Invested Capital value of 7.97%, RDN is doing good in the industry, outperforming 75.76% of the companies in the same industry.
RDN had an Average Return On Invested Capital over the past 3 years of 9.72%. This is below the industry average of 11.83%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.81% | ||
| ROE | 13.01% | ||
| ROIC | 7.97% |
ROA(3y)8.48%
ROA(5y)7.61%
ROE(3y)15.25%
ROE(5y)13.81%
ROIC(3y)9.72%
ROIC(5y)8.66%
1.3 Margins
Looking at the Profit Margin, with a value of 46.29%, RDN belongs to the top of the industry, outperforming 91.92% of the companies in the same industry.
In the last couple of years the Profit Margin of RDN has remained more or less at the same level.
RDN has a Operating Margin of 68.74%. This is amongst the best in the industry. RDN outperforms 91.92% of its industry peers.
In the last couple of years the Operating Margin of RDN has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 68.74% | ||
| PM (TTM) | 46.29% | ||
| GM | N/A |
OM growth 3Y3.1%
OM growth 5Y2.67%
PM growth 3Y1.22%
PM growth 5Y1.25%
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), RDN is creating some value.
RDN has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, RDN has less shares outstanding
Compared to 1 year ago, RDN has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 1.92 indicates that RDN is not a great score, but indicates only limited risk for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 1.92, RDN is in the better half of the industry, outperforming 72.73% of the companies in the same industry.
RDN has a Debt/Equity ratio of 0.52. This is a neutral value indicating RDN is somewhat dependend on debt financing.
RDN's Debt to Equity ratio of 0.52 is in line compared to the rest of the industry. RDN outperforms 59.60% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.52 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.92 |
ROIC/WACC1.04
WACC7.68%
2.3 Liquidity
RDN has a Current Ratio of 3.59. This indicates that RDN is financially healthy and has no problem in meeting its short term obligations.
RDN's Current ratio of 3.59 is amongst the best of the industry. RDN outperforms 84.85% of its industry peers.
A Quick Ratio of 3.59 indicates that RDN has no problem at all paying its short term obligations.
RDN has a Quick ratio of 3.59. This is amongst the best in the industry. RDN outperforms 85.86% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.59 | ||
| Quick Ratio | 3.59 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 4.06% over the past year.
The Earnings Per Share has been growing slightly by 5.29% on average over the past years.
RDN shows a small growth in Revenue. In the last year, the Revenue has grown by 2.95%.
RDN shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -3.31% yearly.
EPS 1Y (TTM)4.06%
EPS 3Y9.31%
EPS 5Y5.29%
EPS Q2Q%-3.88%
Revenue 1Y (TTM)2.95%
Revenue growth 3Y-1%
Revenue growth 5Y-3.31%
Sales Q2Q%0.35%
3.2 Future
The Earnings Per Share is expected to grow by 1.21% on average over the next years.
RDN is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 1.92% yearly.
EPS Next Y-5.28%
EPS Next 2Y-2.11%
EPS Next 3Y1.21%
EPS Next 5YN/A
Revenue Next Year0.58%
Revenue Next 2Y1.44%
Revenue Next 3Y1.92%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 8.36, which indicates a very decent valuation of RDN.
Based on the Price/Earnings ratio, RDN is valued a bit cheaper than the industry average as 78.79% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 26.31, RDN is valued rather cheaply.
A Price/Forward Earnings ratio of 8.64 indicates a reasonable valuation of RDN.
Based on the Price/Forward Earnings ratio, RDN is valued a bit cheaper than the industry average as 63.64% of the companies are valued more expensively.
RDN is valuated cheaply when we compare the Price/Forward Earnings ratio to 22.13, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.36 | ||
| Fwd PE | 8.64 |
4.2 Price Multiples
RDN's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. RDN is cheaper than 82.83% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 7.22 |
4.3 Compensation for Growth
The decent profitability rating of RDN may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.58
EPS Next 2Y-2.11%
EPS Next 3Y1.21%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.97%, RDN has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 5.10, RDN pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.40, RDN pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.97% |
5.2 History
The dividend of RDN is nicely growing with an annual growth rate of 151.22%!
RDN has paid a dividend for at least 10 years, which is a reliable track record.
RDN has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)151.22%
Div Incr Years5
Div Non Decr Years15
5.3 Sustainability
25.42% of the earnings are spent on dividend by RDN. This is a low number and sustainable payout ratio.
RDN's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP25.42%
EPS Next 2Y-2.11%
EPS Next 3Y1.21%
34.27
-0.13 (-0.38%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryFinancial Services
Earnings (Last)
Earnings (Next)
Inst Owners103.08%
Inst Owner Change-5.71%
Ins Owners1.26%
Ins Owner Change8.33%
Market Cap4.60B
Analysts69.09
Price Target37.57 (9.63%)
Short Float %7.16%
Short Ratio5.24
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.97% |
Yearly Dividend1.01
Dividend Growth(5Y)151.22%
DP25.42%
Div Incr Years5
Div Non Decr Years15
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)9.62%
Min EPS beat(2)2.07%
Max EPS beat(2)17.18%
EPS beat(4)4
Avg EPS beat(4)10.13%
Min EPS beat(4)2.07%
Max EPS beat(4)17.18%
EPS beat(8)8
Avg EPS beat(8)14.35%
EPS beat(12)12
Avg EPS beat(12)27.34%
EPS beat(16)15
Avg EPS beat(16)27.08%
Revenue beat(2)0
Avg Revenue beat(2)-3.05%
Min Revenue beat(2)-3.45%
Max Revenue beat(2)-2.66%
Revenue beat(4)0
Avg Revenue beat(4)-2.22%
Min Revenue beat(4)-3.45%
Max Revenue beat(4)-1.07%
Revenue beat(8)1
Avg Revenue beat(8)-3.6%
Revenue beat(12)4
Avg Revenue beat(12)2.04%
Revenue beat(16)8
Avg Revenue beat(16)8.48%
PT rev (1m)0.64%
PT rev (3m)0%
EPS NQ rev (1m)0.57%
EPS NQ rev (3m)1.78%
EPS NY rev (1m)1.11%
EPS NY rev (3m)1.03%
Revenue NQ rev (1m)-2.5%
Revenue NQ rev (3m)-1.77%
Revenue NY rev (1m)-0.14%
Revenue NY rev (3m)-1.58%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.36 | ||
| Fwd PE | 8.64 | ||
| P/S | 3.57 | ||
| P/FCF | N/A | ||
| P/OCF | N/A | ||
| P/B | 1 | ||
| P/tB | 1 | ||
| EV/EBITDA | 7.22 |
EPS(TTM)4.1
EY11.96%
EPS(NY)3.97
Fwd EY11.58%
FCF(TTM)-4.84
FCFYN/A
OCF(TTM)-4.82
OCFYN/A
SpS9.6
BVpS34.15
TBVpS34.15
PEG (NY)N/A
PEG (5Y)1.58
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.81% | ||
| ROE | 13.01% | ||
| ROCE | 10.15% | ||
| ROIC | 7.97% | ||
| ROICexc | 7.99% | ||
| ROICexgc | 9.31% | ||
| OM | 68.74% | ||
| PM (TTM) | 46.29% | ||
| GM | N/A | ||
| FCFM | N/A |
ROA(3y)8.48%
ROA(5y)7.61%
ROE(3y)15.25%
ROE(5y)13.81%
ROIC(3y)9.72%
ROIC(5y)8.66%
ROICexc(3y)9.77%
ROICexc(5y)8.74%
ROICexgc(3y)11.38%
ROICexgc(5y)10.06%
ROCE(3y)12.39%
ROCE(5y)11.04%
ROICexcg growth 3Y-0.5%
ROICexcg growth 5Y-5.38%
ROICexc growth 3Y-1.86%
ROICexc growth 5Y-5.66%
OM growth 3Y3.1%
OM growth 5Y2.67%
PM growth 3Y1.22%
PM growth 5Y1.25%
GM growth 3YN/A
GM growth 5YN/A
F-Score3
Asset Turnover0.15
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.52 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 2.45 | ||
| Cap/Depr | 3.59% | ||
| Cap/Sales | 0.22% | ||
| Interest Coverage | N/A | ||
| Cash Conversion | N/A | ||
| Profit Quality | N/A | ||
| Current Ratio | 3.59 | ||
| Quick Ratio | 3.59 | ||
| Altman-Z | 1.92 |
F-Score3
WACC7.68%
ROIC/WACC1.04
Cap/Depr(3y)15.9%
Cap/Depr(5y)17.62%
Cap/Sales(3y)1.01%
Cap/Sales(5y)1.03%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)4.06%
EPS 3Y9.31%
EPS 5Y5.29%
EPS Q2Q%-3.88%
EPS Next Y-5.28%
EPS Next 2Y-2.11%
EPS Next 3Y1.21%
EPS Next 5YN/A
Revenue 1Y (TTM)2.95%
Revenue growth 3Y-1%
Revenue growth 5Y-3.31%
Sales Q2Q%0.35%
Revenue Next Year0.58%
Revenue Next 2Y1.44%
Revenue Next 3Y1.92%
Revenue Next 5YN/A
EBIT growth 1Y0.03%
EBIT growth 3Y2.07%
EBIT growth 5Y-0.73%
EBIT Next YearN/A
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-275.57%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-266.53%
OCF growth 3YN/A
OCF growth 5YN/A