Ambac (AMBC) versus Radian Group (RDN) Head to Head Analysis

Ambac (NASDAQ: AMBC) and Radian Group (NYSE:RDN) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, dividends, earnings, risk and profitability.

Volatility and Risk

Ambac has a beta of 1.69, indicating that its share price is 69% more volatile than the S&P 500. Comparatively, Radian Group has a beta of 1.54, indicating that its share price is 54% more volatile than the S&P 500.

Insider & Institutional Ownership

74.8% of Ambac shares are owned by institutional investors. Comparatively, 94.8% of Radian Group shares are owned by institutional investors. 1.0% of Ambac shares are owned by company insiders. Comparatively, 1.0% of Radian Group shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Ambac 15.31% 14.34% 1.10%
Radian Group 12.99% 15.05% 7.63%

Dividends

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

Valuation & Earnings

This table compares Ambac and Radian Group’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ambac $621.25 million 1.36 -$328.71 million N/A N/A
Radian Group $1.22 billion 2.78 $121.08 million $1.82 8.70

Radian Group has higher revenue and earnings than Ambac.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Ambac and Radian Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ambac 0 1 1 0 2.50
Radian Group 0 4 7 0 2.64

Ambac currently has a consensus target price of $23.50, suggesting a potential upside of 26.28%. Radian Group has a consensus target price of $23.81, suggesting a potential upside of 50.29%. Given Radian Group’s stronger consensus rating and higher probable upside, analysts plainly believe Radian Group is more favorable than Ambac.

Summary

Radian Group beats Ambac on 11 of the 14 factors compared between the two stocks.

Ambac Company Profile

Ambac Financial Group, Inc., a financial services holding company, provides financial guarantees to clients in public and private sectors worldwide. It offers financial guarantee insurance policies and credit derivative contracts for public finance, structured finance, and international finance. The company was founded in 1971 and is headquartered in New York, New York.

Radian Group Company Profile

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.

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