Radian Group Inc. RDN reported third-quarter 2024 adjusted operating income of $1.03 per share, which beat the Zacks Consensus Estimate by 17%. However, the bottom line decreased 0.9% year over year.
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Operating revenues increased 2.6% year over year to $319 million due to higher net investment income. The metric missed the Zacks Consensus Estimate by 0.3%.
The results reflected solid performance in the All Other segment, higher primary mortgage insurance in force and improved investment income, partially offset by higher expenses and poor performance in the Mortgage segment.
Radian Group Inc. Price, Consensus and EPS Surprise
Radian Group Inc. price-consensus-eps-surprise-chart | Radian Group Inc. Quote
Quarter in Details
Net premiums earned were $235 million, down 0.8% year over year. Net investment income increased 15.6% year over year to $78.3 million.
MI New Insurance Written decreased 3% year over year to $13.5 billion.
Primary mortgage insurance in force increased 1.9% year over year to $274.7 billion.
Persistency — the percentage of mortgage insurance in force that remains in the company’s books after a 12-month period — was 84% as of Sept. 30, 2024, which remained unchanged year over year.
Primary delinquent loans were 22,350 as of Sept. 30, 2024, up 9.5% year over year.
Total expenses increased 24% year over year to $138.4 million. The expense ratio was 23.7, down 30 bps from the year-ago quarter.
Segmental Update
The Mortgage segment reported a year-over-year decrease of 0.2% in total revenues to $287.6 million. Net premiums earned by the segment were $235.1 million, down 0.6% year over year. Claims paid were $3 million, which decreased 40% year over year. The loss ratio was positive 2.7 against negative 3.5 in the year-ago quarter.
The All Other segment reported a year-over-year increase of 22.5% in total revenues to $39.6 million. Net premiums earned by the segment were $3.9 million, up 15.2% year over year. Net investment income grew 58% year over year to $28.1 million. Adjusted pretax operating loss was $4.8 million, narrower than the year-ago loss of $8.7 million.
Financial Update
As of Sept. 30, 2024, Radian Group reported a solid cash balance of $28 million, reflecting an increase of 47.6% from the 2023-end level. The debt-to-capital ratio improved 590 bps to 18.5 from the 2023-end level. Book value per share, a measure of net worth, climbed 17.5% year over year to $31.37 as of Sept. 30, 2024.
In the third quarter, adjusted net operating return on equity was 13.7%, which deteriorated 230 bps year over year.
As of Sept. 30, 2024, Radian Guaranty’s Available Assets under PMIERs totaled approximately $6 billion, resulting in PMIERs excess Available Assets of $2.1 billion.
Share Repurchase and Dividend Update
Radian bought back 1.5 million shares worth $49 million, including commissions, in the third quarter. The remaining repurchase capacity was $618 million as of Sept. 30, 2024. The board of directors paid a quarterly dividend of 24.5 cents per share.
Zacks Rank
Radian currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
Assurant, Inc. AIZ reported third-quarter 2024 net operating income of $3.00 per share, which beat the Zacks Consensus Estimate by 20%. However, the bottom line declined 30.7% year over year. Total revenues increased 7.6% year over year to nearly $3 billion, driven by higher net earned premiums, fees and other income and net investment income. The top line beat the Zacks Consensus Estimate by 2.6%.
Net earned premiums, fees and other income increased 7% year over year to $2.9 billion, driven by growth across both segments. Our estimate was $2.8 billion. Net investment income was down 10.9% year over year to $129.7 million. Our estimate was $130.7 million. The Zacks Consensus Estimate was pegged at $127 million. Total benefits, loss and expenses increased 2.2% to $2.8 billion, mainly due to higher policyholders benefit. Our estimate was $2.5 billion. Adjusted EBITDA, excluding reportable catastrophes, increased 31.6% to $ 246.9 million. Our estimate was $397.7 million.
EverQuote, Inc. EVER reported third-quarter 2024 operating net income per share of 6 cents, which beat the Zacks Consensus Estimate by 63.2%. Moreover, the bottom line rebounded from the year-ago quarter’s loss of 40 cents per share. Revenues in the Automotive insurance vertical increased 202% year over year to $130 million. The Zacks Consensus Estimate was pegged at $126 million. Our estimate was $125.2 million.
Revenues in the Home and Renters insurance vertical totaled $30 million, which increased 14.1% year over year. The Zacks Consensus Estimate and our estimate was pegged at $13.9 million. Revenues in the Other insurance vertical totaled $0.4 million, which plunged 63.3% year over year. The Zacks Consensus Estimate and our estimate was pegged at $0.6 million. Total revenues of $144.5 million beat the Zacks Consensus Estimate by 2.9%. The top line surged 162.7% year over year.
Prudential Financial, Inc. PRU reported third-quarter 2024 adjusted operating income of $3.48 per share, which beat the Zacks Consensus Estimate by 0.2%. However, the bottom line decreased 3.8% year over year.
Total revenues of $19.5 billion surged 94% year over year and beat the Zacks Consensus Estimate by 33.7%. The increase in revenues was due to higher premiums, policy charges and fee income and net investment income.
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