RADIAN GROUP INC (RDN) Stock Fundamental Analysis
USA - NYSE:RDN - US7502361014 - Common Stock
34.73 USD
+0.23 (+0.67%)
36.15 USD
+1.42 (+4.09%)
We assign a fundamental rating of 5 out of 10 to RDN. RDN was compared to 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 is valued correctly, but it does not seem to be growing. Finally 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
RDN had positive earnings in the past year.
In the past year RDN has reported a negative cash flow from operations.
In the past 5 years RDN has always been profitable.
RDN had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
With an excellent Return On Assets value of 6.12%, RDN belongs to the best of the industry, outperforming 82.18% of the companies in the same industry.
RDN has a better Return On Equity (13.06%) than 68.32% of its industry peers.
RDN's Return On Invested Capital of 7.16% is fine compared to the rest of the industry. RDN outperforms 75.25% of its industry peers.
The Average Return On Invested Capital over the past 3 years for RDN is above the industry average of 7.65%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.12% | ||
| ROE | 13.06% | ||
| ROIC | 7.16% |
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 45.62%, RDN belongs to the top of the industry, outperforming 91.09% 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.
The Operating Margin of RDN (67.79%) is better than 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 | 67.79% | ||
| PM (TTM) | 45.62% | ||
| 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.
RDN has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, RDN has a worse debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 1.72, we must say that RDN is in the distress zone and has some risk of bankruptcy.
RDN's Altman-Z score of 1.72 is fine compared to the rest of the industry. RDN outperforms 71.29% of its industry peers.
A Debt/Equity ratio of 0.71 indicates that RDN is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.71, RDN perfoms like the industry average, outperforming 54.46% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.71 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.72 |
ROIC/WACC0.92
WACC7.82%
2.3 Liquidity
RDN has a Current Ratio of 3.85. This indicates that RDN is financially healthy and has no problem in meeting its short term obligations.
With an excellent Current ratio value of 3.85, RDN belongs to the best of the industry, outperforming 88.12% of the companies in the same industry.
RDN has a Quick Ratio of 3.85. This indicates that RDN is financially healthy and has no problem in meeting its short term obligations.
RDN has a Quick ratio of 3.85. This is amongst the best in the industry. RDN outperforms 89.11% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.85 | ||
| Quick Ratio | 3.85 |
3. Growth
3.1 Past
RDN shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 2.49%.
RDN shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 5.29% yearly.
The Revenue has been growing slightly by 0.24% in the past year.
The Revenue has been decreasing by -3.31% on average over the past years.
EPS 1Y (TTM)2.49%
EPS 3Y9.31%
EPS 5Y5.29%
EPS Q2Q%2.02%
Revenue 1Y (TTM)0.24%
Revenue growth 3Y-1%
Revenue growth 5Y-3.31%
Sales Q2Q%-0.09%
3.2 Future
Based on estimates for the next years, RDN will show a small growth in Earnings Per Share. The EPS will grow by 3.24% on average per year.
RDN is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 1.76% yearly.
EPS Next Y-3.01%
EPS Next 2Y-0.17%
EPS Next 3Y3.24%
EPS Next 5YN/A
Revenue Next Year-0.05%
Revenue Next 2Y1.27%
Revenue Next 3Y1.76%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 8.43, the valuation of RDN can be described as reasonable.
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 27.20.
A Price/Forward Earnings ratio of 8.42 indicates a reasonable valuation of RDN.
70.30% of the companies in the same industry are more expensive than RDN, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 22.70. RDN is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.43 | ||
| Fwd PE | 8.42 |
4.2 Price Multiples
RDN's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. RDN is cheaper than 81.19% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 8.22 |
4.3 Compensation for Growth
The decent profitability rating of RDN may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.59
EPS Next 2Y-0.17%
EPS Next 3Y3.24%
5. Dividend
5.1 Amount
RDN has a Yearly Dividend Yield of 2.87%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 4.86, RDN pays a bit more dividend than its industry peers.
RDN's Dividend Yield is a higher than the S&P500 average which is at 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.87% |
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
25.54% 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.
DP25.54%
EPS Next 2Y-0.17%
EPS Next 3Y3.24%
34.73
+0.23 (+0.67%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryFinancial Services
Earnings (Last)
Earnings (Next)
Inst Owners102.96%
Inst Owner Change-4.06%
Ins Owners1.19%
Ins Owner Change5.97%
Market Cap4.70B
Analysts51.43
Price Target37.74 (8.67%)
Short Float %4.89%
Short Ratio7.1
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.87% |
Yearly Dividend1.01
Dividend Growth(5Y)151.22%
DP25.54%
Div Incr Years5
Div Non Decr Years15
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)2.12%
Min EPS beat(2)2.07%
Max EPS beat(2)2.18%
EPS beat(4)4
Avg EPS beat(4)8.39%
Min EPS beat(4)2.07%
Max EPS beat(4)17.18%
EPS beat(8)8
Avg EPS beat(8)12.69%
EPS beat(12)12
Avg EPS beat(12)21.12%
EPS beat(16)15
Avg EPS beat(16)26.8%
Revenue beat(2)0
Avg Revenue beat(2)-2.5%
Min Revenue beat(2)-3.45%
Max Revenue beat(2)-1.55%
Revenue beat(4)0
Avg Revenue beat(4)-2.33%
Min Revenue beat(4)-3.45%
Max Revenue beat(4)-1.55%
Revenue beat(8)1
Avg Revenue beat(8)-2.54%
Revenue beat(12)3
Avg Revenue beat(12)0.74%
Revenue beat(16)7
Avg Revenue beat(16)6.72%
PT rev (1m)0%
PT rev (3m)0.45%
EPS NQ rev (1m)0%
EPS NQ rev (3m)1.26%
EPS NY rev (1m)1.3%
EPS NY rev (3m)2.4%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.97%
Revenue NY rev (1m)-0.61%
Revenue NY rev (3m)-0.63%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.43 | ||
| Fwd PE | 8.42 | ||
| P/S | 3.66 | ||
| P/FCF | N/A | ||
| P/OCF | N/A | ||
| P/B | 1.05 | ||
| P/tB | 1.05 | ||
| EV/EBITDA | 8.22 |
EPS(TTM)4.12
EY11.86%
EPS(NY)4.13
Fwd EY11.88%
FCF(TTM)-8.53
FCFYN/A
OCF(TTM)-8.51
OCFYN/A
SpS9.49
BVpS33.17
TBVpS33.17
PEG (NY)N/A
PEG (5Y)1.59
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.12% | ||
| ROE | 13.06% | ||
| ROCE | 9.13% | ||
| ROIC | 7.16% | ||
| ROICexc | 7.18% | ||
| ROICexgc | 8.35% | ||
| OM | 67.79% | ||
| PM (TTM) | 45.62% | ||
| 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 Turnover0.13
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.71 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 3.33 | ||
| Cap/Depr | 3.55% | ||
| Cap/Sales | 0.24% | ||
| Interest Coverage | N/A | ||
| Cash Conversion | N/A | ||
| Profit Quality | N/A | ||
| Current Ratio | 3.85 | ||
| Quick Ratio | 3.85 | ||
| Altman-Z | 1.72 |
F-Score3
WACC7.82%
ROIC/WACC0.92
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)2.49%
EPS 3Y9.31%
EPS 5Y5.29%
EPS Q2Q%2.02%
EPS Next Y-3.01%
EPS Next 2Y-0.17%
EPS Next 3Y3.24%
EPS Next 5YN/A
Revenue 1Y (TTM)0.24%
Revenue growth 3Y-1%
Revenue growth 5Y-3.31%
Sales Q2Q%-0.09%
Revenue Next Year-0.05%
Revenue Next 2Y1.27%
Revenue Next 3Y1.76%
Revenue Next 5YN/A
EBIT growth 1Y-2.7%
EBIT growth 3Y2.07%
EBIT growth 5Y-0.73%
EBIT Next YearN/A
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-403.87%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-387.71%
OCF growth 3YN/A
OCF growth 5YN/A