Radian Group (NYSE: RDN) and Allied World Assurance (OTCMKTS:AWHHF) are both mid-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, analyst recommendations, profitability, institutional ownership, risk, dividends and earnings.
Insider and Institutional Ownership
91.6% of Radian Group shares are held by institutional investors. Comparatively, 86.5% of Allied World Assurance shares are held by institutional investors. 1.1% of Radian Group shares are held by insiders. Comparatively, 3.2% of Allied World Assurance shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Radian Group has a beta of 1.54, suggesting that its share price is 54% more volatile than the S&P 500. Comparatively, Allied World Assurance has a beta of 0.7, suggesting that its share price is 30% less volatile than the S&P 500.
This is a breakdown of current ratings and recommmendations for Radian Group and Allied World Assurance, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Allied World Assurance||0||4||0||0||2.00|
Radian Group currently has a consensus price target of $22.72, suggesting a potential upside of 6.06%. Allied World Assurance has a consensus price target of $39.25, suggesting a potential downside of 23.86%. Given Radian Group’s stronger consensus rating and higher probable upside, equities analysts plainly believe Radian Group is more favorable than Allied World Assurance.
Radian Group pays an annual dividend of $0.01 per share and has a dividend yield of 0.0%. Allied World Assurance pays an annual dividend of $0.52 per share and has a dividend yield of 1.0%. Radian Group pays out 1.3% of its earnings in the form of a dividend. Allied World Assurance pays out 17.5% 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.
Valuation & Earnings
This table compares Radian Group and Allied World Assurance’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Radian Group||$1.24 billion||3.73||$308.25 million||$0.78||27.46|
|Allied World Assurance||N/A||N/A||N/A||$2.97||17.36|
Radian Group has higher revenue and earnings than Allied World Assurance. Allied World Assurance 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 table compares Radian Group and Allied World Assurance’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Allied World Assurance||12.56%||8.96%||2.42%|
Radian Group beats Allied World Assurance on 10 of the 13 factors compared between the two stocks.
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.
Allied World Assurance Company Profile
Allied World Assurance Company Holdings Ltd is a Germany-based holding company. It provides property, casualty and specialty insurance and reinsurance solutions to clients around the world. The Company operates in three segments: North American Insurance, Global Markets Insurance and Reinsurance. The North American Insurance segment consists of the Company’s direct insurance operations in the United States, Bermuda and Canada. The Global Markets Insurance segment includes all of the Company’s direct insurance operations outside of North America. The Company’s reinsurance segment includes the reinsurance of property, general casualty, professional liability, specialty lines and property catastrophe coverage’s written by other reinsurance companies. The Company leases space in Australia, Bermuda, Canada, Hong Kong, Ireland, Labuan, Singapore, the United Kingdom and the United States for the operation of its North American Insurance, Global Markets Insurance and Reinsurance segments.
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