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. 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 on the other hand it scores bad on growth. 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.
RDN had a negative operating cash flow in the past year.
Each year in the past 5 years RDN has been profitable.
RDN had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
The Return On Assets of RDN (6.81%) is better than 82.18% of its industry peers.
Looking at the Return On Equity, with a value of 13.01%, RDN is in the better half of the industry, outperforming 67.33% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 7.97%, RDN is in the better half of the industry, outperforming 77.23% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for RDN is in line with the industry average of 7.77%.
| 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
With an excellent Profit Margin value of 46.29%, RDN belongs to the best of the industry, outperforming 92.08% of the companies in the same industry.
RDN's Profit Margin has been stable in the last couple of years.
The Operating Margin of RDN (68.74%) 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 | 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.
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
An Altman-Z score of 1.89 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 1.89, RDN is in the better half of the industry, outperforming 71.29% of the companies in the same industry.
A Debt/Equity ratio of 0.52 indicates that RDN is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.52, RDN perfoms like the industry average, outperforming 59.41% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.52 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.89 |
ROIC/WACC1.04
WACC7.64%
2.3 Liquidity
A Current Ratio of 3.59 indicates that RDN has no problem at all paying its short term obligations.
The Current ratio of RDN (3.59) is better than 84.16% 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 better Quick ratio (3.59) than 85.15% of its industry peers.
| 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 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.
Looking at the last year, RDN shows a small growth in Revenue. The Revenue has grown by 4.01% in the last year.
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)2.49%
EPS 3Y9.31%
EPS 5Y5.29%
EPS Q2Q%2.02%
Revenue 1Y (TTM)4.01%
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 1.27% on average per year.
RDN is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 1.89% yearly.
EPS Next Y-4.25%
EPS Next 2Y-0.84%
EPS Next 3Y1.27%
EPS Next 5YN/A
Revenue Next Year0.56%
Revenue Next 2Y1.42%
Revenue Next 3Y1.89%
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
The Price/Earnings ratio is 7.99, which indicates a rather cheap valuation of RDN.
Based on the Price/Earnings ratio, RDN is valued cheaper than 81.19% of the companies in the same industry.
RDN is valuated cheaply when we compare the Price/Earnings ratio to 27.24, which is the current average of the S&P500 Index.
RDN is valuated reasonably with a Price/Forward Earnings ratio of 8.08.
Compared to the rest of the industry, the Price/Forward Earnings ratio of RDN indicates a somewhat cheap valuation: RDN is cheaper than 67.33% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of RDN to the average of the S&P500 Index (36.42), we can say RDN is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.99 | ||
| Fwd PE | 8.08 |
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 | 7.01 |
4.3 Compensation for Growth
The decent profitability rating of RDN may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.51
EPS Next 2Y-0.84%
EPS Next 3Y1.27%
5. Dividend
5.1 Amount
RDN has a Yearly Dividend Yield of 3.10%.
RDN's Dividend Yield is a higher than the industry average which is at 4.75.
RDN's Dividend Yield is a higher than the S&P500 average which is at 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.1% |
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 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-0.84%
EPS Next 3Y1.27%
32.9
-0.02 (-0.06%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryFinancial Services
Earnings (Last)
Earnings (Next)
Inst Owners103.08%
Inst Owner Change1.27%
Ins Owners1.26%
Ins Owner Change6.49%
Market Cap4.42B
Analysts51.43
Price Target37.57 (14.19%)
Short Float %6.29%
Short Ratio6.84
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.1% |
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%
PT rev (3m)2.31%
EPS NQ rev (1m)0.22%
EPS NQ rev (3m)1.36%
EPS NY rev (1m)0.08%
EPS NY rev (3m)2.21%
Revenue NQ rev (1m)-0.02%
Revenue NQ rev (3m)-1.6%
Revenue NY rev (1m)-0.02%
Revenue NY rev (3m)-1.72%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.99 | ||
| Fwd PE | 8.08 | ||
| P/S | 3.43 | ||
| P/FCF | N/A | ||
| P/OCF | N/A | ||
| P/B | 0.96 | ||
| P/tB | 0.96 | ||
| EV/EBITDA | 7.01 |
EPS(TTM)4.12
EY12.52%
EPS(NY)4.07
Fwd EY12.37%
FCF(TTM)-4.84
FCFYN/A
OCF(TTM)-4.82
OCFYN/A
SpS9.6
BVpS34.15
TBVpS34.15
PEG (NY)N/A
PEG (5Y)1.51
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 | 1.89 |
F-Score3
WACC7.64%
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)2.49%
EPS 3Y9.31%
EPS 5Y5.29%
EPS Q2Q%2.02%
EPS Next Y-4.25%
EPS Next 2Y-0.84%
EPS Next 3Y1.27%
EPS Next 5YN/A
Revenue 1Y (TTM)4.01%
Revenue growth 3Y-1%
Revenue growth 5Y-3.31%
Sales Q2Q%-0.09%
Revenue Next Year0.56%
Revenue Next 2Y1.42%
Revenue Next 3Y1.89%
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