Radian Group Near 52-Week High: Time to Buy, Sell or Hold the Stock?

Shares of Radian Group Inc. RDN closed at $34.24 on May 29, near its 52-week high of $37.86. This proximity underscores investor confidence. It has the ingredients for further price appreciation. The stock is trading above the 50-day and 200-day simple moving averages (SMA) of $32.81 and $33.51, respectively, indicating solid upward momentum. SMA is a widely used technical analysis tool to predict future price trends by analyzing historical price data.

With a capitalization of $4.6 billion, the average number of shares traded in the last three months was 1.7 million.

RDN Price Movement vs. 50-Day, 200-Day Moving Average

RDN is an Outperformer

Shares of Radian Group have gained 7.9% year to date, outperforming its industry and the Finance sector’s growth of 3.9% and 4.8%, respectively. The Zacks S&P 500 composite has declined 0.3% in the same time frame.

RDN Outperforms Industry and Sector, Outperforms S&P 500 YTD

RDN has outperformed its peers, Old Republic International Corporation ORI, which has gained 3.9% year to date, while MetLife, Inc. MET and Assurant, Inc. AIZ have lost 3.6% and 6.2%, respectively.

RDN Shares are Affordable

Radian Group shares are trading at a forward price-to-book value of 1.05X, lower than the industry average of 2.44X, the Finance sector’s 4.06X and the Zacks S&P 500 Composite’s 7.94X. Its pricing, at a discount to the industry average, gives a better entry point to investors.

RDN’s Encouraging Growth Projections

The Zacks Consensus Estimate for Radian Group’s 2025 revenues is pegged at $1.26 billion, implying a year-over-year improvement of 0.9%. The consensus estimate for 2026 earnings per share and revenues indicates an increase of 3% and 3.2%, respectively, from the corresponding 2025 estimates.

Radian Group has a solid surprise history. The multi-line insurer has a solid track record of beating earnings estimates in each of the last four quarters, the average being 12.45%.

Bearish Analyst Sentiment on RDN

One of the two analysts covering the stock has lowered estimates for 2025 and 2026 over the past 30 days. Thus, the Zacks Consensus Estimate for 2025 earnings has moved down 0.2% in the past 30 days, and for 2026, the same has moved down 0.7% in the same time frame.

Key Points to Note for RDN

Radian Group’s heightened focus on the core business and services with higher growth potential ensures a predictable and recurring fee-based revenue stream.

New business, combined with increasing annual persistency, should drive continued growth of the insurance-in-force portfolio. Radian Group’s mortgage insurance portfolio creates a strong foundation for future earnings. RDN has been witnessing a declining pattern of claim filings. We expect paid claims to decline further, thus strengthening the balance sheet and improving its financial profile.

This mortgage insurer has been strengthening its capital position with capital contribution, reinsurance transaction and cash position. This helps Radian Group engage in wealth distribution via dividend hikes and share buybacks.

RDN’s Unfavorable Return on Capital

Return on capital in the trailing 12 months was 13.5%, lower than the industry average of 14.9%, reflecting RDN’s inefficiency in utilizing funds to generate income.

End Notes

Radian Group expects the private mortgage insurance market to be approximately 10% bigger in 2025 than in 2024. Improving mortgage insurance portfolio, declining claims, a solid capital position and effective capital deployment should continue to favor mortgage insurers over the long term. 

The 4.1% increase in quarterly dividend in the first quarter of 2025 marks the sixth consecutive year. RDN has increased the quarterly dividend, which has more than doubled over the past five years. Its current dividend yield of 2.9% betters the industry average of 2.6%, making it an attractive pick for yield-seeking investors.

Its solid growth projections as well as attractive valuations are other positives. However, given bearish analysts’ sentiment and poor return on equity, it is better to wait for some more time before taking a call on this Zacks Rank #3 (Hold) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research