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1. Company Snapshot

1.a. Company Description

Radian Group Inc., together with its subsidiaries, engages in the mortgage and real estate services business in the United States.Its Mortgage segment offers credit-related insurance coverage primarily through private mortgage insurance on residential first-lien mortgage loans, as well as other credit risk management, contract underwriting, and fulfillment solutions.This segment primarily serves mortgage originators, such as mortgage banks, commercial banks, savings institutions, credit unions, and community banks.


The company's Homegenius segment offers title services, including a suite of insurance and non-insurance title, tax and title data, centralized recording, document retrieval and default curative title services, and deed and property reports, as well as closing and settlement services comprising electronic execution and traditional signing services; real estate valuation products and services; and asset management services, as well as a suite of real estate technology products and services to facilitate real estate transactions, such as software as a service solutions.This segment serves consumers, mortgage lenders, mortgage and real estate investors, government-sponsored enterprises, and real estate brokers and agents.The company was founded in 1977 and is headquartered in Wayne, Pennsylvania.

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1.b. Last Insights on RDN

Radian Group Inc.'s recent performance was driven by its strategic acquisition of Inigo Limited, a Lloyd's specialty insurer, for $1.7 billion. This move transforms Radian into a global multi-line specialty insurer. The company's mortgage insurance base remains strong, with steady loan quality, rising renewals, and disciplined capital deployment. Additionally, Radian's robust capital position enables ongoing dividends and significant share buybacks. The acquisition is expected to drive growth and diversification. (Source: Zacks Rank #2 (Buy) upgrade).

1.c. Company Highlights

2. Radian Group's Strong Q3 Earnings Driven by Mortgage Insurance Business

Radian Group reported a net income from continuing operations of $153 million, or $1.11 per diluted share, with a return on equity of 13.4%. The actual EPS came out at $1.15, beating estimates of $0.95. The company's book value per share grew 9% year-over-year to $34.34. The mortgage insurance in-force portfolio grew to a record high of $281 billion, with new insurance written increasing 15% compared to the same period last year. The investment portfolio generated net investment income of $63 million, consisting of well-diversified, highly rated securities.

Publication Date: Nov -10

📋 Highlights
  • Strong Mortgage Insurance Performance:: In-force portfolio reached $281 billion, with new insurance written up 15% YoY, and record book value of $34.34/share.
  • Inigo Acquisition Strategy:: $1.7B cash-funded deal to double earned premiums and expand market 12x, projected to boost ROE to >15% and add ~200bps accretion.
  • Liquidity & Dividend Strength:: $995M in liquidity as of Q3, with $195M in dividends expected; $600M intercompany note to fund Inigo, leaving $1.8B liquidity by 2026.
  • Divestiture Progress:: $170M in non-core assets (conduit, title) reclassified as held for sale, with $7M estimated exit costs and completion targeted by Q3 2026.

Divestiture Plan and Acquisition Strategy

The company announced a divestiture plan for its mortgage conduit, title, and real estate services businesses, expected to be completed by the third quarter of 2026. Radian has engaged advisors to lead the sale of these businesses and expects to attract multiple buyers. The divestiture process is well underway, and the company is focused on transforming into a global multiline specialty insurer through the acquisition of Inigo for $1.7 billion. The purchase price will be cash-funded from available liquidity sources and excess capital, with no equity raised.

Liquidity Position and Funding

The company's available holding company liquidity grew to $995 million, with an expected $195 million dividend to be paid in the fourth quarter. Radian expects its holding company liquidity to be approximately $1.8 billion at the beginning of 2026, with sufficient resources to fund the Inigo acquisition and maintain liquidity after the transaction closes. The company will revisit its share repurchase strategy once it regains excess liquidity, likely within a few quarters of the Inigo purchase.

Valuation and Growth Prospects

With a Price-to-Book Ratio of 1.03, the market is pricing in a moderate growth expectation. The acquisition is expected to double Radian's earned premiums and expand the total addressable market by 12 times, enabling the company to strategically allocate capital across diverse insurance lines. Analysts estimate next year's revenue growth at 6.9%. The company's ROE is expected to be over 15% on a book value of around $35, with mid-teen operating earnings per share accretion and approximately 200 basis points of ROE accretion starting in year one.

Risk Assessment and Claim Rate

The company's claim rate assumption of 7.5% is a through-the-cycle estimate, and the company doesn't expect to make changes to it in the near future. Post-COVID, the company has seen strong cure rates, likely due to increased home equity and improved forbearance programs, but expects some normalization as the market returns to pre-COVID conditions. The provision for losses and related credit trends continue to be positive, with strong cure activity and low claim levels.

3. NewsRoom

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Advisors Asset Management Inc. Acquires 16,672 Shares of Radian Group Inc. $RDN

Dec -03

Source: defenseworld.net

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RDN Near 52-Week High: Time to Add the Stock for Better Returns?

Dec -02

Source: zacks.com

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Radian Enters Into $373 Million Excess of Loss (XOL) Reinsurance Transaction

Nov -25

Source: businesswire.com

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Donald Smith & Co's Strategic Moves: Honda Motor Co Ltd Takes Center Stage

Nov -25

Source: gurufocus.com

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Head to Head Survey: Radian Group (NYSE:RDN) & SelectQuote (NYSE:SLQT)

Nov -22

Source: defenseworld.net

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Radian: Attractive With Solid Results And Transformative M&A

Nov -05

Source: seekingalpha.com

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Radian Group Inc. (RDN) Q3 2025 Earnings Call Transcript

Nov -05

Source: seekingalpha.com

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Teacher Retirement System of Texas Buys 2,031 Shares of Radian Group Inc. $RDN

Nov -05

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.51%)

6. Segments

Mortgage

Expected Growth: 4.5%

Radian Group Inc.'s 4.5% mortgage growth is driven by increasing demand for housing, low interest rates, and government-backed mortgage insurance. Additionally, the company's expansion into new markets, improved operational efficiency, and strategic partnerships have contributed to its growth. Furthermore, the rising trend of homeownership among millennials and the growing need for mortgage refinancing have also fueled the company's mortgage business.

All Other

Expected Growth: 3.8%

Radian Group Inc.'s 'All Other' segment growth of 3.8% is driven by increasing demand for title insurance and valuation services, expansion of its mortgage and real estate services, and strategic investments in emerging technologies. Additionally, the segment benefits from a diversified revenue stream, cost savings initiatives, and a strong capital position.

Homegenius

Expected Growth: 6.2%

Homegenius' 6.2% growth is driven by increasing demand for digital mortgage solutions, expansion of Radian's title insurance and valuation services, and strategic partnerships. Additionally, the shift towards online real estate transactions, growing need for efficient mortgage processing, and rising adoption of AI-powered valuation models contribute to the segment's growth.

Adjustments

Expected Growth: 0.5%

Radian Group Inc.'s 0.5 growth driven by increasing demand for mortgage insurance, expansion into new markets, and strategic partnerships. Additionally, the company's focus on risk management and cost containment efforts have contributed to its growth. Furthermore, the low interest rate environment has also boosted refinancing activity, leading to increased revenue for the company.

Inter-segment

Expected Growth: 2.1%

Radian Group Inc.'s 2.1% inter-segment growth is driven by increasing demand for mortgage insurance, expansion of its title insurance business, and growth in its real estate services segment. Additionally, the company's focus on digital transformation, cost savings initiatives, and strategic investments in emerging technologies have contributed to its growth.

7. Detailed Products

Mortgage Insurance

Radian Group Inc. offers mortgage insurance to lenders and borrowers, providing protection against default and foreclosure.

Mortgage Guaranty Insurance

Radian provides mortgage guaranty insurance to lenders, guaranteeing repayment of mortgage loans in the event of default.

Title Insurance

Radian offers title insurance to protect homeowners and lenders from defects in title, ensuring clear ownership of a property.

Real Estate Services

Radian provides real estate services, including valuation, appraisal, and settlement services, to support the mortgage lending process.

Risk Management Services

Radian offers risk management services, including credit risk assessment and portfolio analytics, to help lenders manage risk.

8. Radian Group Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Radian Group Inc. operates in a highly competitive industry, but the threat of substitutes is mitigated by the company's strong brand recognition and customer loyalty.

Bargaining Power Of Customers

Radian Group Inc. has a large customer base, but the bargaining power of customers is high due to the availability of alternative products and services.

Bargaining Power Of Suppliers

Radian Group Inc. has a diversified supplier base, which reduces the bargaining power of suppliers.

Threat Of New Entrants

The threat of new entrants is moderate due to the high barriers to entry in the industry, but Radian Group Inc. needs to continuously innovate to stay ahead of potential competitors.

Intensity Of Rivalry

The intensity of rivalry in the industry is high due to the presence of several established players, and Radian Group Inc. needs to focus on differentiating itself to maintain its market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 25.90%
Debt Cost 7.22%
Equity Weight 74.10%
Equity Cost 9.06%
WACC 8.58%
Leverage 34.96%

11. Quality Control: Radian Group Inc. passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Fidelity National Financial

A-Score: 7.1/10

Value: 7.5

Growth: 6.2

Quality: 7.0

Yield: 8.0

Momentum: 5.0

Volatility: 8.7

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MGIC

A-Score: 6.7/10

Value: 6.0

Growth: 6.6

Quality: 8.4

Yield: 4.0

Momentum: 6.0

Volatility: 9.3

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Assurant

A-Score: 6.6/10

Value: 6.2

Growth: 6.4

Quality: 6.8

Yield: 4.0

Momentum: 7.5

Volatility: 8.3

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Radian Group

A-Score: 6.1/10

Value: 6.7

Growth: 2.9

Quality: 6.8

Yield: 6.0

Momentum: 5.5

Volatility: 9.0

1-Year Total Return ->

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NMI Holdings

A-Score: 6.0/10

Value: 6.8

Growth: 7.7

Quality: 9.1

Yield: 0.0

Momentum: 3.5

Volatility: 9.0

1-Year Total Return ->

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First American

A-Score: 5.8/10

Value: 7.4

Growth: 3.1

Quality: 4.4

Yield: 7.0

Momentum: 4.5

Volatility: 8.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

34.73$

Current Price

34.73$

Potential

-0.00%

Expected Cash-Flows