Radian Group (NYSE:RDN) Shares Gap Up - Should You Buy?

Key Points

• Radian Group shares jumped 3.2%, opening at $36.03 versus a prior close of $34.70, and last traded near $35.72.
• Analyst sentiment remains positive, with six Buy ratings and three Holds producing a consensus “Moderate Buy” rating and a $43.14 target price.
• The company reported strong revenue growth but missed quarterly EPS estimates, while offering a $0.255 quarterly dividend, equivalent to a 2.8% yield.

Shares of Radian Group Inc. (NYSE:RDN - Get Free Report) gapped up before the market opened on Friday. The stock had previously closed at $34.70, but opened at $36.03. Radian Group shares last traded at $35.7190, with a volume of 377,358 shares traded.

Analyst Upgrades and Downgrades

RDN has been the topic of several research analyst reports. Weiss Ratings lowered Radian Group from a "buy (b+)" rating to a "buy (b)" rating in a research note on Tuesday, October 13th. Keefe, Bruyette & Woods lowered their target price on Radian Group from $46.00 to $44.00 and set an "outperform" rating for the company in a research note on Tuesday, August 11th. Barclays increased their target price on shares of Radian Group from $35.00 to $36.00 and gave the stock an "equal weight" rating in a report on Monday, October 5th. BTIG Research started coverage on shares of Radian Group in a research note on Tuesday, September 22nd. They issued a "buy" rating and a $48.00 price target on the stock. Finally, Zacks Research upgraded shares of Radian Group from a "strong sell" rating to a "hold" rating in a research note on Tuesday, October 13th. Six investment analysts have rated the stock with a Buy rating and three have assigned a Hold rating to the company's stock. According to data from MarketBeat, the company presently has a consensus rating of "Moderate Buy" and a consensus target price of $43.14.

Radian Group Stock Up 3.2%

The stock has a market capitalization of $4.74 billion, a price-to-earnings ratio of 9.19, a price-to-earnings-growth ratio of 0.85 and a beta of 0.71. The company has a quick ratio of 0.60, a current ratio of 0.60 and a debt-to-equity ratio of 0.14. The stock has a 50 day moving average price of $34.98 and a 200 day moving average price of $35.94.

Radian Group (NYSE:RDN - Get Free Report) last released its quarterly earnings data on Thursday, August 6th. The insurance provider reported $1.14 earnings per share (EPS) for the quarter, missing the consensus estimate of $1.34 by ($0.20). The firm had revenue of $574.96 million during the quarter, compared to analyst estimates of $556.55 million. Radian Group had a net margin of 32.60% and a return on equity of 13.65%. The business's quarterly revenue was up 92.3% compared to the same quarter last year. During the same period in the prior year, the company earned $1.01 EPS. As a group, analysts forecast that Radian Group Inc. will post 4.85 EPS for the current year.

Radian Group Announces Dividend

The business also recently announced a quarterly dividend, which was paid on Wednesday, September 9th. Shareholders of record on Monday, August 24th were issued a dividend of $0.2550 per share. The ex-dividend date of this dividend was Monday, August 24th. This represents a $1.02 annualized dividend and a yield of 2.8%. Radian Group's payout ratio is presently 26.22%.

Insider Buying and Selling

In related news, EVP Meghan Bartholomew sold 7,812 shares of the company's stock in a transaction that occurred on Monday, September 14th. The stock was sold at an average price of $35.94, for a total value of $280,763.28. Following the sale, the executive vice president directly owned 39,203 shares in the company, valued at $1,408,955.82. This represents a 16.62% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is available at this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. 2.03% of the stock is owned by insiders.

Institutional Trading of Radian Group

Large investors have recently bought and sold shares of the business. IFP Advisors Inc grew its stake in Radian Group by 109.3% during the second quarter. IFP Advisors Inc now owns 672 shares of the insurance provider's stock worth $25,000 after purchasing an additional 351 shares during the period. Root Financial Partners LLC acquired a new stake in shares of Radian Group during the 3rd quarter worth approximately $36,000. Global Retirement Partners LLC bought a new stake in shares of Radian Group in the 2nd quarter valued at $37,000. Integrated Wealth Concepts LLC bought a new stake in shares of Radian Group in the 2nd quarter valued at $44,000. Finally, Nykredit A S acquired a new position in shares of Radian Group during the 2nd quarter valued at $55,000. 95.33% of the stock is currently owned by institutional investors and hedge funds.

Radian Group Company Profile

Radian Group Inc NYSE: RDN is a financial services company that provides mortgage insurance and related services to the residential real estate industry. Through its mortgage insurance subsidiaries, including Radian Guaranty Inc, the company helps lenders manage credit risk on residential mortgages, particularly loans made to borrowers with smaller down payments. Its insurance can also help borrowers obtain home financing without contributing a traditional 20% down payment.

Radian's mortgage insurance business serves mortgage lenders, banks, credit unions and other housing finance participants primarily in the United States.

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