MGIC is definitely headed for better times however, I do not see MGIC as a real competition to Radian as there will be of business for Radian to write $5 billion NIW a month and MGIC to write $3 billion now through 2013.
MGIC will be profitable and Radian Will continue to be also in 2013.
Safer? Maybe... I would argue yes over the next 2-3 years... but there are good arguments for RDN too and they could very well be more stable for the next 1-6 quarters varying on how well the RDN management can handle their denials.
But more understood and priced more accurately? Definitely. I don't think even RDN bulls would argue that MTG has their low denials, huge resulting losses, and potential negative outcomes of BK, FM, etc priced in more accurately than RDN's own variables.
So it depends when you mean by safe. I think RDN could very well be less volatile for the next 1-6 months. A lower beta, if you will.
But if you're asking about the chance for a negative surprise? I think we understand MTG's potential future outcomes a lot better than RDN.
RDN is a good player in MI, I hope it could go up to $5.00+ in the short term. but right now I like MTG better in terms of making money, it is way oversold and has more upside potential. the risk to capital ratio is not a big issure now as long as it has sufficient cash resources to pay claims and not to breach the $1B MPP, and it has MIC, they could write a 100& of new business out of MIC for at least five years at the current quality and volume levels of new insurence written.