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 101 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. These ratings would make RDN suitable 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.
RDN had positive earnings in each of the past 5 years.
Of the past 5 years RDN 4 years had a positive operating cash flow.
1.2 Ratios
RDN has a Return On Assets of 6.98%. This is amongst the best in the industry. RDN outperforms 84.16% of its industry peers.
Looking at the Return On Equity, with a value of 13.07%, RDN is in the better half of the industry, outperforming 62.38% of the companies in the same industry.
RDN has a better Return On Invested Capital (8.25%) than 78.22% of its industry peers.
The Average Return On Invested Capital over the past 3 years for RDN is below the industry average of 11.97%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.98% | ||
| ROE | 13.07% | ||
| ROIC | 8.25% |
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
RDN has a better Profit Margin (46.85%) than 92.08% of its industry peers.
RDN's Profit Margin has been stable in the last couple of years.
RDN has a Operating Margin of 70.27%. This is amongst the best in the industry. RDN outperforms 93.07% of its industry peers.
In the last couple of years the Operating Margin of RDN has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 70.27% | ||
| PM (TTM) | 46.85% | ||
| 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
RDN has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, RDN has less shares outstanding
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
RDN has an Altman-Z score of 1.93. This is not the best score and indicates that RDN is in the grey zone with still only limited risk for bankruptcy at the moment.
The Altman-Z score of RDN (1.93) is better than 74.26% of its industry peers.
RDN has a Debt/Equity ratio of 0.50. This is a healthy value indicating a solid balance between debt and equity.
With a Debt to Equity ratio value of 0.50, RDN perfoms like the industry average, outperforming 57.43% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.5 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.93 |
ROIC/WACC0.66
WACC12.46%
2.3 Liquidity
A Current Ratio of 3.42 indicates that RDN has no problem at all paying its short term obligations.
With an excellent Current ratio value of 3.42, RDN belongs to the best of the industry, outperforming 88.12% of the companies in the same industry.
A Quick Ratio of 3.42 indicates that RDN has no problem at all paying its short term obligations.
With an excellent Quick ratio value of 3.42, RDN belongs to the best of the industry, outperforming 89.11% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.42 | ||
| Quick Ratio | 3.42 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 6.43% over the past year.
RDN shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 5.29% yearly.
Looking at the last year, RDN shows a small growth in Revenue. The Revenue has grown by 3.79% in the last year.
RDN shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -3.31% yearly.
EPS 1Y (TTM)6.43%
EPS 3Y9.31%
EPS 5Y5.29%
EPS Q2Q%13.54%
Revenue 1Y (TTM)3.79%
Revenue growth 3Y-1%
Revenue growth 5Y-3.31%
Sales Q2Q%2.54%
3.2 Future
The Earnings Per Share is expected to grow by 0.09% on average over the next years.
The Revenue is expected to grow by 2.42% on average over the next years.
EPS Next Y-6.32%
EPS Next 2Y-2.18%
EPS Next 3Y0.09%
EPS Next 5YN/A
Revenue Next Year2.23%
Revenue Next 2Y2.7%
Revenue Next 3Y2.42%
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 7.48, which indicates a rather cheap valuation of RDN.
Based on the Price/Earnings ratio, RDN is valued a bit cheaper than the industry average as 79.21% of the companies are valued more expensively.
RDN's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 28.29.
Based on the Price/Forward Earnings ratio of 7.98, the valuation of RDN can be described as very cheap.
Based on the Price/Forward Earnings ratio, RDN is valued a bit cheaper than the industry average as 65.35% of the companies are valued more expensively.
RDN is valuated cheaply when we compare the Price/Forward Earnings ratio to 21.32, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.48 | ||
| Fwd PE | 7.98 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of RDN indicates a rather cheap valuation: RDN is cheaper than 82.18% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 6.83 |
4.3 Compensation for Growth
RDN has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.41
EPS Next 2Y-2.18%
EPS Next 3Y0.09%
5. Dividend
5.1 Amount
RDN has a Yearly Dividend Yield of 3.23%.
RDN's Dividend Yield is a higher than the industry average which is at 4.93.
RDN's Dividend Yield is a higher than the S&P500 average which is at 2.51.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.23% |
5.2 History
On average, the dividend of RDN grows each year by 151.22%, which is quite nice.
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
25.14% of the earnings are spent on dividend by RDN. This is a low number and sustainable payout ratio.
The dividend of RDN is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP25.14%
EPS Next 2Y-2.18%
EPS Next 3Y0.09%
30.96
-0.64 (-2.03%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryFinancial Services
Earnings (Last)
Earnings (Next)
Inst Owners101.65%
Inst Owner Change-0.91%
Ins Owners0.92%
Ins Owner Change-3.88%
Market Cap4.37B
Analysts69.09
Price Target37.57 (21.35%)
Short Float %8.64%
Short Ratio9.32
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.23% |
Yearly Dividend1.01
Dividend Growth(5Y)151.22%
DP25.14%
Div Incr Years5
Div Non Decr Years15
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)14.67%
Min EPS beat(2)12.15%
Max EPS beat(2)17.18%
EPS beat(4)4
Avg EPS beat(4)14.95%
Min EPS beat(4)9.12%
Max EPS beat(4)21.36%
EPS beat(8)8
Avg EPS beat(8)17.72%
EPS beat(12)12
Avg EPS beat(12)31.49%
EPS beat(16)15
Avg EPS beat(16)26.96%
Revenue beat(2)0
Avg Revenue beat(2)-2.17%
Min Revenue beat(2)-2.66%
Max Revenue beat(2)-1.68%
Revenue beat(4)0
Avg Revenue beat(4)-1.68%
Min Revenue beat(4)-2.66%
Max Revenue beat(4)-1.07%
Revenue beat(8)1
Avg Revenue beat(8)-3.83%
Revenue beat(12)5
Avg Revenue beat(12)3.96%
Revenue beat(16)9
Avg Revenue beat(16)9.8%
PT rev (1m)0%
PT rev (3m)1.31%
EPS NQ rev (1m)-0.29%
EPS NQ rev (3m)2.78%
EPS NY rev (1m)-0.07%
EPS NY rev (3m)4.56%
Revenue NQ rev (1m)0.43%
Revenue NQ rev (3m)-0.02%
Revenue NY rev (1m)0.03%
Revenue NY rev (3m)-0.9%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.48 | ||
| Fwd PE | 7.98 | ||
| P/S | 3.39 | ||
| P/FCF | N/A | ||
| P/OCF | N/A | ||
| P/B | 0.95 | ||
| P/tB | 0.95 | ||
| EV/EBITDA | 6.83 |
EPS(TTM)4.14
EY13.37%
EPS(NY)3.88
Fwd EY12.53%
FCF(TTM)-4.72
FCFYN/A
OCF(TTM)-4.7
OCFYN/A
SpS9.14
BVpS32.74
TBVpS32.74
PEG (NY)N/A
PEG (5Y)1.41
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.98% | ||
| ROE | 13.07% | ||
| ROCE | 10.51% | ||
| ROIC | 8.25% | ||
| ROICexc | 8.29% | ||
| ROICexgc | 9.68% | ||
| OM | 70.27% | ||
| PM (TTM) | 46.85% | ||
| 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-Score2
Asset Turnover0.15
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.5 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 2.34 | ||
| Cap/Depr | 4.03% | ||
| Cap/Sales | 0.25% | ||
| Interest Coverage | 8.42 | ||
| Cash Conversion | N/A | ||
| Profit Quality | N/A | ||
| Current Ratio | 3.42 | ||
| Quick Ratio | 3.42 | ||
| Altman-Z | 1.93 |
F-Score2
WACC12.46%
ROIC/WACC0.66
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)6.43%
EPS 3Y9.31%
EPS 5Y5.29%
EPS Q2Q%13.54%
EPS Next Y-6.32%
EPS Next 2Y-2.18%
EPS Next 3Y0.09%
EPS Next 5YN/A
Revenue 1Y (TTM)3.79%
Revenue growth 3Y-1%
Revenue growth 5Y-3.31%
Sales Q2Q%2.54%
Revenue Next Year2.23%
Revenue Next 2Y2.7%
Revenue Next 3Y2.42%
Revenue Next 5YN/A
EBIT growth 1Y3.03%
EBIT growth 3Y2.07%
EBIT growth 5Y-0.73%
EBIT Next YearN/A
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-229.93%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-225.34%
OCF growth 3YN/A
OCF growth 5YN/A