Here's How Much a $1000 Investment in Radian Made 10 Years Ago Would Be Worth Today
How much a stock's price changes over time is important for most investors, since price performance can both impact your investment portfolio and help you compare investment results across sectors and industries.
Another factor that can influence investors is FOMO, or the fear of missing out, especially with tech giants and popular consumer-facing stocks.
What if you'd invested in Radian (RDN) ten years ago? It may not have been easy to hold on to RDN for all that time, but if you did, how much would your investment be worth today?
Radian's Business In-Depth
With that in mind, let's take a look at Radian's main business drivers.
Founded in 1977 and headquartered in Philadelphia, PA, Radian Group Inc. is a credit enhancement company which supports homebuyers, mortgage lenders, loan servicers and investors with a suite of private mortgage insurance and related risk-management products and services. Radian trades on the New York Stock Exchange under the symbol RDN.
The company had two business segments — Mortgage Insurance and Mortgage and Real Estate Services.
Mortgage Insurance (96.2% of 2021 Net Premium Earned) – This segment provides credit-related insurance coverage, principally through private mortgage insurance and risk management services, to mortgage lending institutions. The company conducts mortgage insurance business primarily through Radian Guaranty, its principal mortgage insurance subsidiary. Mortgage insurance is of immense importance in the U.S. housing finance system as it offers home ownership at affordable rates and pacify risks related to residential mortgage loans. In 2021, service revenues in the segment increased 19.6% year over year to $17.7 million.
During the second quarter of 2021, Radian introduced homegenius that replaced its former Real Estate segment. Renaming the segment was in line with aligning with updates to branding strategy for the segment’s products and services. The homegenius business segment (3.8%) encompasses a suite of existing and emerging digital products and services that leverage big data and analytics and are powered by advanced technology to serve real estate agents, lenders, investors and consumers across the real estate ecosystem.
The company made a series of acquisitions to enhance its product offerings. In 2018, it acquired the businesses of EnTitle Direct (in March) and Independent Settlement Services (in November), as well as the assets of Five Bridges (in December), to enhance its product offerings.
Bottom Line
While anyone can invest, building a lucrative investment portfolio takes research, patience, and a little bit of risk. If you had invested in Radian ten years ago, you're probably feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in November 2012 would be worth $4,436.40, or a 343.64% gain, as of November 14, 2022. Investors should keep in mind that this return excludes dividends but includes price appreciation.
In comparison, the S&P 500 gained 189.37% and the price of gold went up -1.54% over the same time frame.
Analysts are anticipating more upside for RDN.
Radian Group remains focused on improving mortgage insurance portfolio to drive long-term earnings growth. Business restructuring intensifies its focus on core business and services with higher-growth potential, ensuring predictable and recurring fee-based revenue stream. It is thus poised to benefit from strong mortgage insurance market Based on strong credit characteristics of new loans insured, declining claim payments aid. Solid persistency and rise in new mortgage insurance business are driving insurance in force to increase. Its robust capital position enables it to deploy capital. Shares have outperformed the industry year to date. However, high cost tend to weigh on margin expansion. Increased provision for losses in mortgage insurance business concern us. Given the pandemic, it expects slowdown in purchase loan volume.
Shares have gained 7.66% over the past four weeks and there have been 1 higher earnings estimate revisions for fiscal 2022 compared to none lower. The consensus estimate has moved up as well.
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