Leading US private mortgage insurer. AGI Score 5/10. Aggressive buybacks (-27% shares). Trading at 0.93x book. | Analysis date: 2026-03-13
Radian is a mortgage insurance cash machine: $583M net income on $1.2B revenue (49% net margin) with almost zero CapEx. Shares have been reduced from 153M to 135M (-12%) in just 2 years, with $431M spent on buybacks in FY2025 alone. The company just acquired Inigo (Lloyd's specialty insurer) to diversify beyond mortgage insurance. At 0.93x book, you're buying the insurance book near liquidation value while the company aggressively returns capital. The question: is mortgage insurance durable in an AGI world, and does the Inigo acquisition help or hurt?
Radian is a leading US private mortgage insurer. When homebuyers put down less than 20%, lenders require private mortgage insurance (PMI). Radian insures the lender against default. This is a regulatory mandate — as long as people buy homes with <20% down, Radian has a market.
Near-zero CapEx business. Revenue is premiums collected on existing insurance. Costs are claims paid when borrowers default. In good times, this business prints money. $583M net income on minimal capital needs = extraordinary ROE. The entire business is essentially a balance sheet with reserves.
Inigo Acquisition (Feb 2026): Radian acquired Inigo, a Lloyd's specialty insurer, to diversify into property, casualty, and specialty insurance. This moves Radian from pure mortgage insurance to a multi-line insurer.
| Item | FY2025 | Notes |
|---|---|---|
| Total Assets | $8.1B | Mostly investment portfolio + reserves |
| Stockholders' Equity | $4.8B | 59% equity ratio — extremely strong |
| Total Debt | $1.1B | Debt/Equity = 0.24x — very low |
| Goodwill | $0 | Zero goodwill — all tangible |
| Cash | $25M | Low cash but investment portfolio is liquid |
| PP&E | $17M | Negligible — true asset-light business |
| Book Value / Share | $35.29 | 135.5M shares |
| Year | Revenue | Net Income | Shares (M) | Buyback |
|---|---|---|---|---|
| FY2022 | $1.19B | $743M | ~160M | ($400M) |
| FY2023 | $1.18B | $603M | 153M | ($133M) |
| FY2024 | $1.21B | $604M | 148M | ($225M) |
| FY2025 | $1.20B | $583M | 135M | ($432M) |
This is the most aggressive buyback story in the batch. Shares reduced from ~160M to 135M in 3 years (-15.6%). In FY2025 alone, $432M in buybacks — 74% of net income returned through buybacks. With $3.08% dividend yield on top, total shareholder return is massive.
At this buyback rate, in 5 years shares could be below 100M, meaning EPS doubles even with flat earnings.
Verdict: NOT a 10x candidate but an excellent compounder. Buybacks + dividends + stable earnings = likely 12-18% annual returns. This is a Buffett-style "wonderful business at a fair price."
| Book Value / Share | $35.29 | Zero goodwill — all tangible |
| Trough Earnings Floor | $20-25 | In housing crisis, NI could drop to $200M. 200M ÷ 135M × 15x = $22 |
| Liquidation Floor | $28-32 | Book value is highly liquid (investments + reserves) |
| Normalized Earnings | $35-45 | $580M NI ÷ 135M shares × 8-10x = $34-43 |
RDN at $33 is fairly priced. P/E of 7.5x on stable earnings with aggressive buybacks. Floor is $20-25 in a housing downturn. The key risk is a housing crisis that spikes default rates.
Rating: WATCHLIST — Buy at $22-25. At that price, you're buying at trough valuation with the buyback machine still running. The 3% dividend provides income while you wait.
Data sources: SEC EDGAR XBRL (CIK 890926), yfinance, 10-K filing (FY2025). Analysis date: 2026-03-13.