RADIAN GROUP INC (RDN) Stock Fundamental Analysis
NYSE:RDN - New York Stock Exchange, Inc. - US7502361014 - Common Stock - Currency: USD
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 has a valuation in line with the averages, but it does not seem to be growing. Finally RDN also has an excellent dividend rating. This makes RDN very considerable for dividend investing!
1. Profitability
1.1 Basic Checks
In the past year RDN was profitable.
RDN had a negative operating cash flow in the past year.
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 6.98%, RDN belongs to the best of the industry, outperforming 84.16% of the companies in the same industry.
The Return On Equity of RDN (13.07%) is better than 63.37% of its industry peers.
Looking at the Return On Invested Capital, with a value of 8.25%, RDN is in the better half of the industry, outperforming 78.22% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for RDN is below the industry average of 11.84%.
| 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
The Profit Margin of RDN (46.85%) is better than 92.08% of its industry peers.
RDN's Profit Margin has been stable in the last couple of years.
RDN has a better Operating Margin (70.27%) than 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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), RDN is destroying value.
The number of shares outstanding for RDN has been reduced compared to 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 1.94 indicates that RDN is not a great score, but indicates only limited risk for bankruptcy at the moment.
The Altman-Z score of RDN (1.94) is better than 74.26% of its industry peers.
A Debt/Equity ratio of 0.50 indicates that RDN is not too dependend on debt financing.
RDN has a Debt to Equity ratio of 0.50. This is comparable to the rest of the industry: RDN outperforms 58.42% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.5 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.94 |
ROIC/WACC0.66
WACC12.43%
2.3 Liquidity
A Current Ratio of 3.42 indicates that RDN has no problem at all paying its short term obligations.
Looking at the Current ratio, with a value of 3.42, RDN belongs to the top 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.
Looking at the Quick ratio, with a value of 3.42, RDN belongs to the top 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 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 4.01%.
Measured over the past years, RDN shows a decrease in Revenue. The Revenue has been decreasing by -3.31% on average per year.
EPS 1Y (TTM)4.06%
EPS 3Y9.31%
EPS 5Y5.29%
EPS Q2Q%-3.88%
Revenue 1Y (TTM)4.01%
Revenue growth 3Y-1%
Revenue growth 5Y-3.31%
Sales Q2Q%29.86%
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 0.09% on average per year.
RDN is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.42% yearly.
EPS Next Y-6.32%
EPS Next 2Y-2.18%
EPS Next 3Y0.09%
EPS Next 5YN/A
Revenue Next Year2.32%
Revenue Next 2Y2.55%
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
Based on the Price/Earnings ratio of 7.94, the valuation of RDN can be described as very cheap.
Compared to the rest of the industry, the Price/Earnings ratio of RDN indicates a rather cheap valuation: RDN is cheaper than 81.19% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.85, RDN is valued rather cheaply.
The Price/Forward Earnings ratio is 8.22, which indicates a very decent valuation of RDN.
Based on the Price/Forward Earnings ratio, RDN is valued a bit cheaper than the industry average as 68.32% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 20.77. RDN is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.94 | ||
| Fwd PE | 8.22 |
4.2 Price Multiples
83.17% 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 | 6.88 |
4.3 Compensation for Growth
The decent profitability rating of RDN may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.5
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 4.92.
Compared to an average S&P500 Dividend Yield of 2.45, RDN pays a bit more dividend than the S&P500 average.
| 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 been paying a dividend for at least 10 years, so it has a reliable track record.
RDN has not decreased their dividend for at least 10 years, which is a reliable track record.
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.
RDN's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP25.14%
EPS Next 2Y-2.18%
EPS Next 3Y0.09%
32.56
+0.62 (+1.94%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryFinancial Services
Earnings (Last)
Earnings (Next)
Inst Owners101.65%
Inst Owner Change-1.3%
Ins Owners0.92%
Ins Owner Change-3.88%
Market Cap4.60B
Analysts69.09
Price Target36.72 (12.78%)
Short Float %7.17%
Short Ratio4.78
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)-2.26%
PT rev (3m)-0.98%
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)0.12%
Revenue NY rev (3m)-0.8%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.94 | ||
| Fwd PE | 8.22 | ||
| P/S | 3.56 | ||
| P/FCF | N/A | ||
| P/OCF | N/A | ||
| P/B | 0.99 | ||
| P/tB | 0.99 | ||
| EV/EBITDA | 6.88 |
EPS(TTM)4.1
EY12.59%
EPS(NY)3.96
Fwd EY12.17%
FCF(TTM)-4.72
FCFYN/A
OCF(TTM)-4.7
OCFYN/A
SpS9.14
BVpS32.74
TBVpS32.74
PEG (NY)N/A
PEG (5Y)1.5
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 | 1.94 |
F-Score2
WACC12.43%
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)4.06%
EPS 3Y9.31%
EPS 5Y5.29%
EPS Q2Q%-3.88%
EPS Next Y-6.32%
EPS Next 2Y-2.18%
EPS Next 3Y0.09%
EPS Next 5YN/A
Revenue 1Y (TTM)4.01%
Revenue growth 3Y-1%
Revenue growth 5Y-3.31%
Sales Q2Q%29.86%
Revenue Next Year2.32%
Revenue Next 2Y2.55%
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