Meadowbrook Insurance Group (NYSE: MIG) and Radian Group (NYSE:RDN) are both property & casualty insurance – nec companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, dividends, profitability, risk, earnings, analyst recommendations and institutional ownership.

Profitability

This table compares Meadowbrook Insurance Group and Radian Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Meadowbrook Insurance Group 4.54% 7.19% 1.16%
Radian Group 14.88% 12.99% 6.51%

Dividends

Radian Group pays an annual dividend of $0.01 per share and has a dividend yield of 0.0%. Meadowbrook Insurance Group does not pay a dividend. Radian Group pays out 1.3% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Meadowbrook Insurance Group and Radian Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Meadowbrook Insurance Group 0 0 0 0 N/A
Radian Group 0 2 8 0 2.80

Radian Group has a consensus target price of $23.88, indicating a potential upside of 7.89%. Given Radian Group’s higher probable upside, analysts clearly believe Radian Group is more favorable than Meadowbrook Insurance Group.

Insider & Institutional Ownership

91.4% of Radian Group shares are owned by institutional investors. 1.1% of Radian Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Meadowbrook Insurance Group and Radian Group’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Meadowbrook Insurance Group N/A N/A N/A $0.53 16.30
Radian Group $1.24 billion 3.85 $308.25 million $0.79 28.01

Radian Group has higher revenue and earnings than Meadowbrook Insurance Group. Meadowbrook Insurance Group is trading at a lower price-to-earnings ratio than Radian Group, indicating that it is currently the more affordable of the two stocks.

Summary

Radian Group beats Meadowbrook Insurance Group on 11 of the 12 factors compared between the two stocks.

Meadowbrook Insurance Group Company Profile

Meadowbrook Insurance Group, Inc. (Meadowbrook) is a holding company. The Company is a commercial insurance underwriter and insurance administration services company. The Company markets and underwrites specialty property and casualty insurance programs and products through a network of independent retail agents, wholesalers, program administrators and general agents. The Company’s products include Admitted Programs and Standard Market Products, Main Street Excess and Surplus Lines, Non-Admitted Programs, and Specialty Market Products. The Company is also involved in a range of activities, including program and product design, underwriting risk selection and policy issuance, claims administration and handling, loss prevention and control and reinsurance. The Company also provides the following services to its fee-for-service and agency clients: administration of risk-bearing entities and agency services.

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.

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