State National Companies (NASDAQ: SNC) and Radian Group (NYSE:RDN) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, dividends, profitability, analyst recommendations, institutional ownership, risk and valuation.
Valuation & Earnings
This table compares State National Companies and Radian Group’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|State National Companies||$235.57 million||3.76||$91.47 million||$1.28||16.41|
|Radian Group||$1.19 billion||3.64||$676.01 million||$0.85||23.66|
Radian Group has higher revenue and earnings than State National Companies. State National Companies is trading at a lower price-to-earnings ratio than Radian Group, indicating that it is currently the more affordable of the two stocks.
This is a summary of recent ratings and target prices for State National Companies and Radian Group, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|State National Companies||1||2||1||0||2.00|
State National Companies currently has a consensus target price of $38.00, suggesting a potential upside of 80.95%. Radian Group has a consensus target price of $22.04, suggesting a potential upside of 9.58%. Given State National Companies’ higher possible upside, analysts plainly believe State National Companies is more favorable than Radian Group.
State National Companies pays an annual dividend of $0.24 per share and has a dividend yield of 1.1%. Radian Group pays an annual dividend of $0.01 per share and has a dividend yield of 0.0%. State National Companies pays out 18.8% of its earnings in the form of a dividend. Radian Group pays out 1.2% 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.
Volatility & Risk
State National Companies has a beta of 1.08, meaning that its share price is 8% more volatile than the S&P 500. Comparatively, Radian Group has a beta of 1.51, meaning that its share price is 51% more volatile than the S&P 500.
This table compares State National Companies and Radian Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|State National Companies||22.98%||17.65%||1.80%|
Institutional and Insider Ownership
57.2% of State National Companies shares are owned by institutional investors. Comparatively, 90.0% of Radian Group shares are owned by institutional investors. 32.2% of State National Companies shares are owned by insiders. Comparatively, 1.1% of Radian Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
State National Companies Company Profile
State National Companies, Inc. is a specialty provider of property and casualty insurance. The Company’s segments include Program Services, Lender Services and Corporate. In the Program Services segment, the Company operates an issuing carrier (fronting) business to provide insurance capacity access to the United States property and casualty insurance markets. In the Lender Services segment, the Company specializes in providing collateral protection insurance, which insures automobiles held as collateral for loans made by financial institutions. The Company writes its insurance business through its insurance company subsidiaries, which include State National Insurance Company, Inc. (SNIC), National Specialty Insurance Company (NSIC) and United Specialty Insurance Company (USIC). As of December 31, 2016, SNIC and NSIC were admitted carriers licensed to write property and casualty business in all 50 states and the District of Columbia. USIC is an admitted carrier in Delaware.
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.
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