Radian Group (NYSE:RDN) versus CNO Financial Group (NYSE:CNO) Head to Head Survey

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

Risk and Volatility

Radian Group has a beta of 0.75, meaning that its stock price is 25% less volatile than the S&P 500. Comparatively, CNO Financial Group has a beta of 0.9, meaning that its stock price is 10% less volatile than the S&P 500.

Earnings and Valuation

This table compares Radian Group and CNO Financial Group”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Radian Group	$1.29 billion	3.66	$604.44 million	$3.97	8.78
CNO Financial Group	$4.45 billion	0.86	$404.00 million	$2.71	14.57

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

Insider & Institutional Ownership

95.3% of Radian Group shares are held by institutional investors. Comparatively, 95.4% of CNO Financial Group shares are held by institutional investors. 2.2% of Radian Group shares are held by company insiders. Comparatively, 3.4% of CNO Financial Group shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Dividends

Radian Group pays an annual dividend of $1.02 per share and has a dividend yield of 2.9%. CNO Financial Group pays an annual dividend of $0.68 per share and has a dividend yield of 1.7%. Radian Group pays out 25.7% of its earnings in the form of a dividend. CNO Financial Group pays out 25.1% 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. Radian Group has increased its dividend for 6 consecutive years and CNO Financial Group has increased its dividend for 2 consecutive years. Radian Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of current ratings and price targets for Radian Group and CNO Financial Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Radian Group	0	4	0	0	2.00
CNO Financial Group	0	3	2	0	2.40

Radian Group presently has a consensus target price of $37.00, suggesting a potential upside of 6.17%. CNO Financial Group has a consensus target price of $43.40, suggesting a potential upside of 9.91%. Given CNO Financial Group’s stronger consensus rating and higher probable upside, analysts clearly believe CNO Financial Group is more favorable than Radian Group.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Radian Group	45.62%	13.25%	6.88%
CNO Financial Group	6.41%	16.63%	1.13%

Summary

CNO Financial Group beats Radian Group on 10 of the 17 factors compared between the two stocks.

About Radian Group

Radian Group Inc., together with its subsidiaries, engages in the mortgage and real estate services business in the United States. It operates through two segments, Mortgage Insurance and Homegenius segments. The Mortgage Insurance segment aggregates, manages, and distributes U.S. mortgage credit risk for mortgage lending institutions and mortgage credit investors, through private mortgage insurance on residential first-lien mortgage loans; and other credit risk management solutions, including contract underwriting. The Homegenius segment offers title services, including a suite of insurance and non-insurance titles; tax and title data, centralized recording, document retrieval, and default curative title services; deed and property reports; closing and settlement services; mortgage underwriting and processing; escrow; appraisal management; and real estate brokerage. This segment also provides real estate valuation products and services; asset management services for managing real estate owned properties, which includes a web-based workflow solution; and a suite of real estate technology products and services to facilitate real estate transactions, such as proprietary platforms as a service solution. It serves mortgage originators, such as mortgage bankers, commercial banks, savings institutions, credit unions, and community banks; and consumers, mortgage lenders, mortgage and real estate investors, government-sponsored enterprises, real estate brokers and agents, and corporations for their employees. The company was formerly known as CMAC Investment Corp. and changed its name to Radian Group Inc. in June 1999. Radian Group Inc. was founded in 1977 and is headquartered in Wayne, Pennsylvania.

About CNO Financial Group

CNO Financial Group, Inc., through its subsidiaries, develops, markets, and administers health insurance, annuity, individual life insurance, insurance products, and financial services for senior and middle-income markets in the United States. It offers Medicare supplement, supplemental health, and long-term care insurance policies; life insurance; and annuities, as well as Medicare advantage plans to individuals through phone, online, mail, and face-to-face. The company also focuses on sale of voluntary benefit life and health insurance products for businesses, associations, and other membership groups by interacting with customers at their place of employment. In addition, it provides fixed indexed annuities; fixed interest annuities, including fixed rate single and flexible premium deferred annuities; single premium immediate annuities; supplemental health products, such as specified disease, accident, and hospital indemnity products; and long-term care plans primarily to retirees and older self-employed individuals in the middle-income market. Further, the company offers universal life and other interest-sensitive life products; and traditional life policies that include whole life, graded benefit life, term life, and single premium whole life products, as well as graded benefit life insurance products. It markets its products under the Bankers Life, Washington National, and Colonial Penn brand names. The company was founded in 1979 and is headquartered in Carmel, Indiana.