Radian Group (NYSE: RDN) and Navigators Group (NASDAQ:NAVG) are both financials companies, but which is the better business? We will contrast the two companies based on the strength of their valuation, profitability, risk, analyst recommendations, dividends, earnings and institutional ownership.

Institutional and Insider Ownership

91.5% of Radian Group shares are held by institutional investors. Comparatively, 74.0% of Navigators Group shares are held by institutional investors. 1.1% of Radian Group shares are held by company insiders. Comparatively, 24.1% of Navigators Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Radian Group and Navigators Group’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Radian Group $1.24 billion 3.98 $308.25 million $0.79 28.97
Navigators Group $1.20 billion 1.21 $82.72 million $1.15 42.83

Radian Group has higher revenue and earnings than Navigators Group. Radian Group is trading at a lower price-to-earnings ratio than Navigators Group, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Radian Group and Navigators Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Radian Group 0 2 8 0 2.80
Navigators Group 1 2 1 0 2.00

Radian Group presently has a consensus target price of $23.88, indicating a potential upside of 4.30%. Navigators Group has a consensus target price of $51.50, indicating a potential upside of 4.57%. Given Navigators Group’s higher possible upside, analysts clearly believe Navigators Group is more favorable than Radian Group.

Volatility and Risk

Radian Group has a beta of 1.57, meaning that its stock price is 57% more volatile than the S&P 500. Comparatively, Navigators Group has a beta of 0.78, meaning that its stock price is 22% less volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Radian Group 14.88% 12.99% 6.51%
Navigators Group 2.79% 2.32% 0.56%

Dividends

Radian Group pays an annual dividend of $0.01 per share and has a dividend yield of 0.0%. Navigators Group pays an annual dividend of $0.24 per share and has a dividend yield of 0.5%. Radian Group pays out 1.3% of its earnings in the form of a dividend. Navigators Group pays out 20.9% 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.

Summary

Radian Group beats Navigators Group on 11 of the 16 factors compared between the two stocks.

Radian Group Company Profile

Radian Group Inc. is an insurance holding company that provides mortgage insurance, and products and services to the real estate and mortgage finance industries. The Company operates in two segments: Mortgage Insurance and Services. The Mortgage Insurance segment provides credit-related insurance coverage, principally through private mortgage insurance to mortgage lending institutions. The Services segment provides outsourced services, information-based analytics valuations and specialty consulting and surveillance services for buyers and sellers of, and investors in, mortgage- and real estate-related loans and securities, as well as other asset-backed securities (ABS). It also offers mortgage insurance products, such as primary mortgage insurance and pool insurance. Its Services segment is engaged in offering businesses, such as loan review and due diligence, and surveillance, including residential mortgage-backed securities (RMBS) surveillance and loan servicer oversight.

Navigators Group Company Profile

The Navigators Group, Inc. is an insurance holding company. The Company is an international insurance company focused on marine insurance. The Company’s segments include U.S. Insurance, International Insurance (Int’l Insurance), Global Reinsurance (GlobalRe) and Corporate. The Company’s Property and Casualty (P&C) insurance business primarily offers general liability coverage, and umbrella and excess liability coverage to commercial enterprises through its U.S. Insurance and Int’l Insurance segments. It also offers reinsurance products through its GlobalRe segment. It distributes its products through international, national and regional, retail and wholesale insurance brokers. The Company’s U.S. Insurance and Int’l Insurance segments consists of three segments, such as Marine, Property and Casualty (P&C) and Professional Liability. Its GlobalRe products include accident & health (A&H), marine, P&C and professional liability.

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