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Radian Group (RDN) Announces Share Buyback Plan Worth $100M

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The board of directors of Radian Group Inc. RDN recently authorized a share buyback program to return more value to investors. This latest authorization will allow the company to spend up to $100 million to repurchase its common stock.

The company’s previous share repurchase program, approved on Aug 9, 2017, has been fully utilized and the same expired on Jun 30, 2018. Hence, as of Jun 30, 2018, the company has no shares remaining under its authorized buyback program. The new buyback authorization will expire on Jul 31, 2019 and is effective immediately.

The Multi line insurer remains committed toward boosting shareholder value through such share repurchases and dividend payouts. A solid financial position over the years has enabled the insurer to take part in such endeavors, which in turn, raises optimism among investors as well.  

As of Jun 30, 2018, the company had cash worth $95.6 million, up 18.6% from the 2017-end level. Operating cash flow in the first half of 2018 was approximately $300.8 million, which improved 45.7% from the figure recorded in the same period of 2017. Hence, we remain optimistic about Radian Group’s efforts in further improving its capital as well as liquidity position that will not only allow the company to return more value to investors but also accelerate its growth in the near term.  

Moreover, Radian Group remains focused on its attempts toward efficient and prudent capital deployment. This balanced approach supports the company’s diversified and integrated businesses, thus meeting the needs of its clients and creating a long-term shareholder value.

Share repurchases benefit the company’s earnings per share, book value as well as its shareholder equity as shares outstanding trim down. Therefore, share repurchase programs buoy hope among investors and boost their confidence in the stock.

This apart, the board of directors of the insurer approved 0.25 cents per share, payable Sep 7, 2018 to shareholders of record as of Aug 27, 2018. The company’s current dividend yield is 0.05%. Over the last decade, this Multi line insurer has been consistently paying dividends. Such steadfast endeavors spread a bullish sentiment around the stock, making it an attractive pick for yield-seeking investors.

Zacks Rank and Share Price Movement

Currently, Radian Group sports a Zacks Rank #1 (Strong Buy). Shares of Radian Group have rallied 19.4% against the industry’s decline of 2.8%. We expect improving mortgage insurance in force, declining claim payments and a robust capital position to drive the shares higher in the near term.  




Other Stocks to Consider

Investors interested in other top-ranked stocks from the insurance industry can also consider Alleghany Corporation Y, NMI Holdings Inc. NMIH and The Progressive Corporation PGR, each sporting a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Alleghany provides property and casualty reinsurance and insurance products in the United States and internationally. The company delivered positive surprises in three of the trailing four quarters with an average beat of 17.61%.

NMI Holdings provides private mortgage guaranty insurance services in the United States. The company pulled off positive surprises in all the trailing four quarters with an average positive surprise of 29.85%.

Progressive Corporation provides personal and commercial auto insurance, residential property insurance and other specialty property-casualty insurance plus related services, primarily in the United States. The company came up with positive surprises in all the preceding four quarters with an average earnings surprise of 9.19%.

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Radian Group Inc. (RDN) : Free Stock Analysis Report
 
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