Comparing Radian Group (RDN) & Essent Group (ESNT)

Radian Group (NYSE: RDN) and Essent Group (NYSE:ESNT) are both mid-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, profitability, earnings, dividends, valuation, risk and institutional ownership.

Profitability

This table compares Radian Group and Essent Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Radian Group 12.99% 14.94% 7.58%
Essent Group 68.82% 18.80% 13.49%



Dividends

Radian Group pays an annual dividend of $0.01 per share and has a dividend yield of 0.1%. Essent Group does not pay a dividend. Radian Group pays out 0.5% of its earnings in the form of a dividend.

Earnings and Valuation

This table compares Radian Group and Essent Group’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Radian Group $1.22 billion 2.93 $121.08 million $1.82 9.18
Essent Group $576.51 million 6.32 $379.74 million $3.10 11.97

Essent Group has lower revenue, but higher earnings than Radian Group. Radian Group is trading at a lower price-to-earnings ratio than Essent Group, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Radian Group has a beta of 1.55, suggesting that its stock price is 55% more volatile than the S&P 500. Comparatively, Essent Group has a beta of 1.21, suggesting that its stock price is 21% more volatile than the S&P 500.

Insider and Institutional Ownership

93.7% of Radian Group shares are owned by institutional investors. Comparatively, 90.4% of Essent Group shares are owned by institutional investors. 1.0% of Radian Group shares are owned by company insiders. Comparatively, 3.0% of Essent Group shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Radian Group and Essent Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Radian Group 0 4 7 0 2.64
Essent Group 0 1 9 0 2.90

Radian Group presently has a consensus target price of $23.69, suggesting a potential upside of 41.88%. Essent Group has a consensus target price of $51.75, suggesting a potential upside of 39.45%. Given Radian Group’s higher probable upside, research analysts clearly believe Radian Group is more favorable than Essent Group.

Summary

Essent Group beats Radian Group on 11 of the 16 factors compared between the two stocks.

About Radian Group

Radian Group Inc., through its subsidiaries, provides mortgage and real estate products and services in the United States. It operates through two segments, Mortgage Insurance and Services. The Mortgage Insurance segment offers credit-related insurance coverage, primarily through private mortgage insurance, as well as other credit risk management solutions to mortgage lending institutions; and primary mortgage insurance coverage on residential first-lien mortgage loans. This segment primarily serves mortgage bankers, commercial banks, savings institutions, credit unions and community banks. The Services segment offers mortgage services, including transaction management services, such as loan review, residential mortgage-backed securities securitization and distressed asset reviews, servicer and loan surveillance, and underwriting; and real estate services comprising real estate owned asset management, review and valuation services related to single family rental properties, real estate valuation services, and real estate brokerage services, as well as title and settlement services that include title search, settlement, and closing services. This segment provides its mortgage and real estate services to mortgage lenders, financial institutions, mortgage and real estate investors, government entities, and others. The company was founded in 1977 and is headquartered in Philadelphia, Pennsylvania.

About Essent Group

Essent Group Ltd., through its subsidiaries, provides private mortgage insurance and reinsurance for mortgages secured by residential properties located in the United States. The company also provides information technology maintenance and development services; customer support-related services; and contract underwriting services. It serves originators of residential mortgage loans, such as regulated depository institutions, mortgage banks, credit unions, and other lenders. The company was founded in 2008 and is based in Hamilton, Bermuda.

Receive News & Ratings for Radian Group Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Radian Group and related companies with MarketBeat.com's FREE daily email newsletter.

Leave a Reply