Radian Group (RDN) & National Interstate (NATL) Critical Comparison

Radian Group (NYSE: RDN) and National Interstate (NASDAQ:NATL) are both financials companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, dividends, risk, valuation, earnings and institutional ownership.

Profitability

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

Net Margins Return on Equity Return on Assets
Radian Group 14.88% 12.99% 6.51%
National Interstate 5.91% 10.13% 1.94%

Analyst Recommendations

This is a summary of current recommendations and price targets for Radian Group and National Interstate, as reported by MarketBeat.com.

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

Radian Group currently has a consensus price target of $23.88, indicating a potential upside of 6.92%. Given Radian Group’s higher probable upside, research analysts clearly believe Radian Group is more favorable than National Interstate.

Institutional and Insider Ownership

91.5% of Radian Group shares are owned by institutional investors. Comparatively, 84.9% of National Interstate shares are owned by institutional investors. 1.1% of Radian Group shares are owned by company insiders. Comparatively, 11.8% of National Interstate shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

Radian Group pays an annual dividend of $0.01 per share and has a dividend yield of 0.0%. National Interstate pays an annual dividend of $0.56 per share and has a dividend yield of 1.7%. Radian Group pays out 1.3% of its earnings in the form of a dividend. National Interstate pays out 40.6% 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 National Interstate’s gross 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 3.89 $308.25 million $0.79 28.27
National Interstate N/A N/A N/A $1.38 23.56

Radian Group has higher revenue and earnings than National Interstate. National Interstate 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 National Interstate on 9 of the 12 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.

National Interstate Company Profile

National Interstate Corporation and its subsidiaries operate as an insurance holding company that underwrites and sells traditional and alternative property and casualty insurance products to the passenger transportation, trucking and moving and storage industries, general commercial insurance to small businesses in Hawaii and Alaska and personal insurance to owners of recreational vehicles throughout the United States. The Company is a specialty property and casualty insurance company with a focus on the transportation industry. The Company operates through property and casualty insurance segment. The Company offers approximately 40 product lines in the specialty property and casualty insurance market, which it groups into approximately four general business components: alternative risk transfer (ART), transportation, specialty personal lines, and Hawaii and Alaska based on the class of business, insureds’ risk participation or geographic location.

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