Comparing Fidelity National Financial (NYSE:FNF) & Radian Group (NYSE:RDN)

Fidelity National Financial (NYSE:FNF) and Radian Group (NYSE:RDN) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, valuation, earnings, analyst recommendations and risk.

Volatility & Risk

Fidelity National Financial has a beta of 1, suggesting that its share price has a similar volatility profile to the S&P 500.Comparatively, Radian Group has a beta of 0.82, suggesting that its share price is 18% less volatile than the S&P 500.

Earnings and Valuation

This table compares Fidelity National Financial and Radian Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Fidelity National Financial	$13.68 billion	1.13	$1.27 billion	$4.15	13.22
Radian Group	$1.29 billion	3.49	$604.44 million	$4.01	8.29

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Fidelity National Financial	8.34%	15.06%	1.33%
Radian Group	45.90%	13.29%	6.93%

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Fidelity National Financial and Radian Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fidelity National Financial	0	1	3	0	2.75
Radian Group	1	4	2	0	2.14

Fidelity National Financial presently has a consensus target price of $68.25, indicating a potential upside of 24.44%. Radian Group has a consensus target price of $40.00, indicating a potential upside of 20.30%. Given Fidelity National Financial’s stronger consensus rating and higher possible upside, analysts clearly believe Fidelity National Financial is more favorable than Radian Group.

Institutional and Insider Ownership

81.2% of Fidelity National Financial shares are owned by institutional investors. Comparatively, 95.3% of Radian Group shares are owned by institutional investors. 5.5% of Fidelity National Financial shares are owned by insiders. Comparatively, 2.2% of Radian Group shares are owned by 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

Fidelity National Financial pays an annual dividend of $2.08 per share and has a dividend yield of 3.8%. Radian Group pays an annual dividend of $1.02 per share and has a dividend yield of 3.1%. Fidelity National Financial pays out 50.1% of its earnings in the form of a dividend. Radian Group pays out 25.4% 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. Fidelity National Financial has raised its dividend for 1 consecutive years and Radian Group has raised its dividend for 6 consecutive years.

Summary

Fidelity National Financial beats Radian Group on 11 of the 17 factors compared between the two stocks.

About Fidelity National Financial

Fidelity National Financial, Inc., together with its subsidiaries, provides various insurance products in the United States. The company operates through Title, F&G, and Corporate and Other segments. It offers title insurance, escrow, and other title related services, including trust activities, trustee sales guarantees, recordings and reconveyances, and home warranty products. The company also provides technology and transaction services to the real estate and mortgage industries; and mortgage transaction services, including title-related services and facilitation of production and management of mortgage loans. In addition, it offers annuity and life insurance products, such as deferred and immediate annuities, as well as indexed universal life insurance products; and funding agreements and pension risk transfer (PRT) solutions. Further, the company engages in the real estate brokerage business. Fidelity National Financial, Inc. was incorporated in 2005 and is headquartered in Jacksonville, Florida.

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.