RADIAN GROUP INC (RDN) Stock Fundamental Analysis
NYSE:RDN - New York Stock Exchange, Inc. - US7502361014 - Common Stock - Currency: USD
RDN gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 101 industry peers in the Financial Services industry. RDN has an average financial health and profitability rating. RDN has a valuation in line with the averages, but it does not seem to be growing. Finally RDN also has an excellent dividend rating. These ratings would make RDN suitable for dividend investing!
1. Profitability
1.1 Basic Checks
RDN had positive earnings in the past year.
RDN had a negative operating cash flow in the past year.
In the past 5 years RDN has always been profitable.
Of the past 5 years RDN 4 years had a positive operating cash flow.
1.2 Ratios
RDN has a Return On Assets of 6.81%. This is amongst the best in the industry. RDN outperforms 83.17% of its industry peers.
The Return On Equity of RDN (13.01%) is better than 68.32% of its industry peers.
With a decent Return On Invested Capital value of 7.97%, RDN is doing good in the industry, outperforming 77.23% 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 in line with the industry average of 11.69%.
| 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
RDN's Profit Margin of 46.29% is amongst the best of the industry. RDN outperforms 92.08% of its industry peers.
In the last couple of years the Profit Margin of RDN has remained more or less at the same level.
RDN's Operating Margin of 68.74% is amongst the best of the industry. RDN outperforms 92.08% 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
RDN has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
The number of shares outstanding for RDN has been reduced compared to 1 year ago.
RDN has less shares outstanding than it did 5 years ago.
RDN has a worse debt/assets ratio than last year.
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 0.52. This is a neutral value indicating RDN is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.52, RDN perfoms like the industry average, outperforming 58.42% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.52 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.93 |
ROIC/WACC1
WACC8%
2.3 Liquidity
A Current Ratio of 3.59 indicates that RDN has no problem at all paying its short term obligations.
RDN has a Current ratio of 3.59. This is amongst the best in the industry. RDN outperforms 86.14% of its industry peers.
RDN has a Quick Ratio of 3.59. This indicates that RDN is financially healthy and has no problem in meeting its short term obligations.
With an excellent Quick ratio value of 3.59, RDN belongs to the best of the industry, outperforming 87.13% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.59 | ||
| Quick Ratio | 3.59 |
3. Growth
3.1 Past
RDN shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 4.06%.
Measured over the past 5 years, RDN shows a small growth in Earnings Per Share. The EPS has been growing by 5.29% on average per year.
The Revenue has been growing slightly by 2.95% in the past year.
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.
The Revenue is expected to grow by 1.92% on average over the next years.
EPS Next Y-5.28%
EPS Next 2Y-2.11%
EPS Next 3Y1.21%
EPS Next 5YN/A
Revenue Next Year0.72%
Revenue Next 2Y1.73%
Revenue Next 3Y1.92%
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
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
RDN is valuated reasonably with a Price/Earnings ratio of 8.07.
Based on the Price/Earnings ratio, RDN is valued a bit cheaper than 75.25% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.03, RDN is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 8.34, the valuation of RDN can be described as reasonable.
RDN's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. RDN is cheaper than 60.40% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.94. RDN is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.07 | ||
| Fwd PE | 8.34 |
4.2 Price Multiples
85.15% of the companies in the same industry are more expensive than RDN, based on the Enterprise Value to EBITDA ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 7.27 |
4.3 Compensation for Growth
The decent profitability rating of RDN may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.53
EPS Next 2Y-2.11%
EPS Next 3Y1.21%
5. Dividend
5.1 Amount
RDN has a Yearly Dividend Yield of 3.00%.
RDN's Dividend Yield is a higher than the industry average which is at 4.87.
RDN's Dividend Yield is a higher than the S&P500 average which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3% |
5.2 History
The dividend of RDN is nicely growing with an annual growth rate of 151.22%!
RDN has been paying a dividend for at least 10 years, so it has 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
RDN pays out 25.42% of its income as dividend. This is a 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%
33.08
-1.21 (-3.53%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryFinancial Services
Earnings (Last)
Earnings (Next)
Inst Owners101.65%
Inst Owner Change-5.41%
Ins Owners0.92%
Ins Owner Change-4.84%
Market Cap4.67B
Analysts70
Price Target37.33 (12.85%)
Short Float %6.89%
Short Ratio4.85
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3% |
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)-0.63%
PT rev (3m)0.87%
EPS NQ rev (1m)0.79%
EPS NQ rev (3m)1.43%
EPS NY rev (1m)1.11%
EPS NY rev (3m)1.03%
Revenue NQ rev (1m)-1.59%
Revenue NQ rev (3m)-1.78%
Revenue NY rev (1m)-1.47%
Revenue NY rev (3m)-2.17%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.07 | ||
| Fwd PE | 8.34 | ||
| P/S | 3.62 | ||
| P/FCF | N/A | ||
| P/OCF | N/A | ||
| P/B | 1.02 | ||
| P/tB | 1.02 | ||
| EV/EBITDA | 7.27 |
EPS(TTM)4.1
EY12.39%
EPS(NY)3.97
Fwd EY11.99%
FCF(TTM)-4.6
FCFYN/A
OCF(TTM)-4.58
OCFYN/A
SpS9.13
BVpS32.48
TBVpS32.48
PEG (NY)N/A
PEG (5Y)1.53
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 | 1.93 |
F-Score3
WACC8%
ROIC/WACC1
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 Year0.72%
Revenue Next 2Y1.73%
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