Head-To-Head Analysis: Radian Group (NYSE:RDN) versus The PMI Group (OTCMKTS:PPMIQ)

The PMI Group (OTCMKTS:PPMIQ) and Radian Group (NYSE:RDN) are both finance, insurance, and real estate companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, dividends, earnings, analyst recommendations, profitability and risk.

Analyst Recommendations

This is a summary of recent ratings for The PMI Group and Radian Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
The PMI Group	0	0	0	0	0.00
Radian Group	0	3	2	0	2.40

Radian Group has a consensus target price of $36.10, suggesting a potential upside of 12.64%. Given Radian Group’s stronger consensus rating and higher probable upside, analysts clearly believe Radian Group is more favorable than The PMI Group.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
The PMI Group	N/A	N/A	N/A
Radian Group	45.96%	13.81%	7.80%

Valuation & Earnings

This table compares The PMI Group and Radian Group”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
The PMI Group	N/A	N/A	N/A	N/A	N/A
Radian Group	$1.30 billion	3.66	$603.12 million	$3.86	8.30

Radian Group has higher revenue and earnings than The PMI Group.

Institutional and Insider Ownership

95.3% of Radian Group shares are owned by institutional investors. 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 is poised for long-term growth.

Summary

Radian Group beats The PMI Group on 9 of the 9 factors compared between the two stocks.

About The PMI Group

The PMI Group, Inc. (TPG) through its subsidiary PMI Mortgage Insurance Co. (MIC), and its affiliated companies (collectively PMI), provides residential mortgage insurance in the United States. During the year ended December 31, 2009, the Company operated in three business segments: United States Mortgage Insurance Operations, International Operations and Corporate and Other. As a United States residential mortgage insurer, PMI offers a variety of mortgage insurance products to meet the capital and credit risk mitigation needs of its customers. In November 2011, the Company announced that it has filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware.

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.