Radian Group (NYSE: RDN) and Endurance Specialty Holdings (NYSE:ENH) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their profitability, institutional ownership, analyst recommendations, dividends, risk, earnings and valuation.
Radian Group pays an annual dividend of $0.01 per share and has a dividend yield of 0.1%. Endurance Specialty Holdings pays an annual dividend of $1.52 per share and has a dividend yield of 1.6%. Radian Group pays out 1.2% of its earnings in the form of a dividend. Endurance Specialty Holdings pays out 25.3% 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. Endurance Specialty Holdings has raised its dividend for 6 consecutive years. Endurance Specialty Holdings is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Insider and Institutional Ownership
90.0% of Radian Group shares are held by institutional investors. Comparatively, 82.7% of Endurance Specialty Holdings shares are held by institutional investors. 1.8% of Radian Group shares are held by company insiders. Comparatively, 5.8% of Endurance Specialty Holdings shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Volatility and Risk
Radian Group has a beta of 1.58, meaning that its stock price is 58% more volatile than the S&P 500. Comparatively, Endurance Specialty Holdings has a beta of 0.56, meaning that its stock price is 44% less volatile than the S&P 500.
This table compares Radian Group and Endurance Specialty Holdings’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Endurance Specialty Holdings||4.79%||1.62%||0.82%|
Earnings & Valuation
This table compares Radian Group and Endurance Specialty Holdings’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Radian Group||$1.19 billion||3.13||$676.01 million||$0.85||20.35|
|Endurance Specialty Holdings||N/A||N/A||N/A||$6.00||15.50|
Radian Group has higher revenue and earnings than Endurance Specialty Holdings. Endurance Specialty Holdings 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 recommendations and price targets for Radian Group and Endurance Specialty Holdings, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Endurance Specialty Holdings||0||4||0||0||2.00|
Radian Group presently has a consensus price target of $20.86, suggesting a potential upside of 20.56%. Endurance Specialty Holdings has a consensus price target of $93.00, suggesting a potential upside of 0.02%. Given Radian Group’s stronger consensus rating and higher possible upside, research analysts plainly believe Radian Group is more favorable than Endurance Specialty Holdings.
Radian Group beats Endurance Specialty Holdings on 10 of the 14 factors compared between the two stocks.
About Radian Group
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.
About Endurance Specialty Holdings
Endurance Specialty Holdings Ltd. is a holding company. The Company, through its operating subsidiaries in Bermuda, the United States and the United Kingdom, focuses on underwriting specialty lines of personal and commercial property, and casualty insurance and reinsurance. It operates through two segments: Insurance and Reinsurance. In the Insurance segment, it writes agriculture, casualty and other specialty, professional lines, and property, marine/energy and aviation insurance. In the Reinsurance segment, it writes catastrophe, property, casualty, professional lines and specialty reinsurance. Its Insurance and Reinsurance segments both include property-related coverages, which provide insurance or reinsurance of an insurable interest in tangible property for property loss, damage or loss of use. In addition, its Insurance and Reinsurance segments include various casualty insurance and reinsurance coverages, which are concerned with the losses caused by injuries to third parties.
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