Navigators Group (NASDAQ: NAVG) and Radian Group (NYSE:RDN) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, valuation, profitability, risk, dividends and earnings.

Profitability

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

Net Margins Return on Equity Return on Assets
Navigators Group 2.79% 2.32% 0.56%
Radian Group 14.88% 12.99% 6.51%

Earnings & Valuation

This table compares Navigators Group and Radian Group’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Navigators Group $1.20 billion 1.21 $82.72 million $1.15 42.65
Radian Group $1.24 billion 3.85 $308.25 million $0.78 28.37

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

Risk and Volatility

Navigators Group has a beta of 0.78, suggesting that its share price is 22% less volatile than the S&P 500. Comparatively, Radian Group has a beta of 1.57, suggesting that its share price is 57% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Navigators Group and Radian Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Navigators Group 1 2 1 0 2.00
Radian Group 0 2 8 0 2.80

Navigators Group presently has a consensus target price of $51.50, suggesting a potential upside of 4.99%. Radian Group has a consensus target price of $23.88, suggesting a potential upside of 7.89%. Given Radian Group’s stronger consensus rating and higher possible upside, analysts clearly believe Radian Group is more favorable than Navigators Group.

Institutional & Insider Ownership

74.0% of Navigators Group shares are owned by institutional investors. Comparatively, 91.4% of Radian Group shares are owned by institutional investors. 24.1% of Navigators Group shares are owned by insiders. Comparatively, 1.1% of Radian Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Dividends

Navigators Group pays an annual dividend of $0.24 per share and has a dividend yield of 0.5%. Radian Group pays an annual dividend of $0.01 per share and has a dividend yield of 0.0%. Navigators Group pays out 20.9% of its earnings in the form of a dividend. Radian Group pays out 1.3% 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.

Summary

Radian Group beats Navigators Group on 12 of the 16 factors compared between the two stocks.

About Navigators Group

The Navigators Group, Inc. is an insurance holding company. The Company is an international insurance company focused on marine insurance. The Company’s segments include U.S. Insurance, International Insurance (Int’l Insurance), Global Reinsurance (GlobalRe) and Corporate. The Company’s Property and Casualty (P&C) insurance business primarily offers general liability coverage, and umbrella and excess liability coverage to commercial enterprises through its U.S. Insurance and Int’l Insurance segments. It also offers reinsurance products through its GlobalRe segment. It distributes its products through international, national and regional, retail and wholesale insurance brokers. The Company’s U.S. Insurance and Int’l Insurance segments consists of three segments, such as Marine, Property and Casualty (P&C) and Professional Liability. Its GlobalRe products include accident & health (A&H), marine, P&C and professional liability.

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.

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