Radian Group (NYSE: RDN) and Old Republic International (NYSE:ORI) are both mid-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, risk, profitability and dividends.
Earnings & Valuation
This table compares Radian Group and Old Republic International’s revenue, earnings per share and valuation.
||Earnings Per Share
|Old Republic International
Old Republic International has higher revenue and earnings than Radian Group. Radian Group is trading at a lower price-to-earnings ratio than Old Republic International, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Radian Group has a beta of 1.52, meaning that its stock price is 52% more volatile than the S&P 500. Comparatively, Old Republic International has a beta of 1.25, meaning that its stock price is 25% more volatile than the S&P 500.
Radian Group pays an annual dividend of $0.01 per share and has a dividend yield of 0.1%. Old Republic International pays an annual dividend of $0.78 per share and has a dividend yield of 3.6%. Radian Group pays out 0.5% of its earnings in the form of a dividend. Old Republic International pays out 70.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Old Republic International has raised its dividend for 36 consecutive years. Old Republic International is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This is a summary of current recommendations and price targets for Radian Group and Old Republic International, as provided by MarketBeat.com.
||Strong Buy Ratings
|Old Republic International
Radian Group presently has a consensus target price of $24.53, suggesting a potential upside of 52.92%. Old Republic International has a consensus target price of $25.00, suggesting a potential upside of 14.47%. Given Radian Group’s higher possible upside, analysts clearly believe Radian Group is more favorable than Old Republic International.
Insider and Institutional Ownership
94.5% of Radian Group shares are held by institutional investors. Comparatively, 73.5% of Old Republic International shares are held by institutional investors. 1.0% of Radian Group shares are held by insiders. Comparatively, 2.0% of Old Republic International shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
This table compares Radian Group and Old Republic International’s net margins, return on equity and return on assets.
||Return on Equity
||Return on Assets
|Old Republic International
Radian Group beats Old Republic International on 10 of the 18 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 Old Republic International
Old Republic International Corporation, through its subsidiaries, engages in the insurance underwriting and related services business primarily in the United States and Canada. The company operates through three segments: General Insurance Group, Title Insurance Group, and the Republic Financial Indemnity Group Run-off Business. The General Insurance Group segment offers automobile extended warranty, aviation, commercial automobile, commercial multi-peril, general liability, home warranty, inland marine, travel accident, and workers' compensation insurance products; and financial indemnity products for specialty coverages, including errors and omissions, fidelity, guaranteed asset protection, and surety. This segment provides its insurance products to businesses, government, and other institutions in transportation, commercial construction, healthcare, education, retail and wholesale trade, forest products, energy, general manufacturing, and financial services industries. The Title Insurance Group segment offers lenders' and owners' title insurance policies to real estate purchasers and investors based upon searches of the public records. This segment also provides escrow closing and construction disbursement services; and real estate information products, national default management services, and various other services pertaining to real estate transfers and loan transactions. The Republic Financial Indemnity Group Run-off Business segment offers private mortgage insurance coverage that protects mortgage lenders and investors from default related losses on residential mortgage loans made primarily to homebuyers. It is also involved in the consumer credit indemnity run-off business. Old Republic International Corporation was founded in 1887 and is headquartered in Chicago, Illinois.
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