Radian Increases Share Repurchase Authorization from $300 Million to $900 Million and Approves Regular Quarterly Dividend on Common Stock

Rhea-AI Summary

Radian Group (NYSE: RDN) has announced an increase in its share repurchase authorization from $300 million to $900 million, extending the program to June 30, 2026. This move allows the company to repurchase an additional $600 million in shares, depending on market and business conditions. As of March 31, 2024, Radian has already repurchased approximately 7 million shares for a total of $183 million. Additionally, the Board of Directors has approved a regular quarterly dividend of $0.245 per share, payable on June 20, 2024, to stockholders of record as of June 4, 2024.

Positive

• Share repurchase authorization increased from $300 million to $900 million.
• Program extension of share repurchase to June 30, 2026.
• Radian has repurchased approximately 7 million shares for $183 million as of March 31, 2024.
• Approval of a regular quarterly dividend of $0.245 per share.
• Strong financial position and capital flexibility underscored.

Negative

• Increase in share repurchase program could be seen as a lack of better investment opportunities.
• Significant repurchase might not suffice if market conditions worsen.
• Stockholder value returns heavily reliant on market and business condition fluctuations.

Insights

Financial Analyst

The expansion of Radian Group's share repurchase program from $300 million to $900 million is significant for several reasons. Share buybacks often indicate that a company believes its stock is undervalued and by reducing the number of shares outstanding, they can improve metrics like earnings per share (EPS) and return on equity (ROE). This move demonstrates confidence in their financial health and future prospects. Importantly, the extension of the program through June 30, 2026, provides Radian with ample time to execute these buybacks strategically based on market conditions. This action can positively impact investor sentiment in the short term as it indicates strong cash flow and financial stability.

Additionally, the approval of a regular quarterly dividend of $0.245 per share underscores the company’s commitment to returning value to shareholders consistently. Dividends are often a signal of a stable and healthy cash flow. Over time, this can attract income-focused investors looking for reliable dividend stocks. However, it's also important for investors to monitor how these buybacks and dividends affect Radian's overall capital structure and whether they are sustainable in the long run given market conditions and potential future financial obligations.

Market Research Analyst

From a market perspective, Radian Group’s decision to significantly expand its share repurchase authorization is noteworthy. Buybacks can lead to increased demand for the company’s stock, potentially driving up the stock price. This could be particularly beneficial if Radian's stock has been underperforming or trading below intrinsic value, as repurchases can help stabilize and boost the share price. The extension of the authorization through 2026 also suggests a long-term strategy, allowing the company to buy back shares during periods of market volatility or dips, potentially at lower prices.

However, investors should be aware of the broader market conditions and industry trends that could influence Radian's stock performance. For instance, factors such as interest rate changes, housing market trends and regulatory changes in the mortgage insurance industry could impact the effectiveness and timing of these buybacks. Additionally, while buybacks are generally positive, they should not come at the expense of investment in growth opportunities or operational improvements. Investors should keep an eye on how Radian balances these financial strategies to ensure long-term value creation.

WAYNE, Pa.--(BUSINESS WIRE)-- Radian Group Inc. (NYSE: RDN) announced its Board of Directors has approved an increase in its existing share repurchase program from $300 million to $900 million and a program extension to June 30, 2026.

This expanded authorization will allow Radian the flexibility to repurchase an additional $600 million of shares based on market and business conditions, stock price and other factors, through privately negotiated, open market or other transactions (including through the use of trading plans intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended). As of March 31, 2024, approximately 7 million shares for a total cost of $183 million, have been repurchased under this program, which was previously set to expire on January 31, 2025.

“We are pleased that our strong financial position and capital flexibility allow us to support our growth initiatives, deliver innovative products and provide best-in-class service to our customers, while also opportunistically returning value to our stockholders,” said Chief Executive Officer Rick Thornberry.

The company’s Board of Directors also approved a regular quarterly dividend on its common stock in the amount of $0.245 per share, payable June 20, 2024, to stockholders of record as of June 4, 2024.

About Radian

Radian is ensuring the American dream of homeownership responsibly and sustainably through products and services that include industry-leading mortgage insurance and a comprehensive suite of mortgage, risk, real estate, securitization, and title services. Powered by technology, informed by data and driven to deliver new and better ways to transact and manage risk, Radian is shaping the future of mortgage and real estate services. Learn more at radian.com.

FORWARD-LOOKING STATEMENTS

All statements in this press release that address events, developments or results that we expect or anticipate may occur in the future are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the U.S. Private Securities Litigation Reform Act of 1995. In most cases, forward-looking statements may be identified by words such as “anticipate,” “may,” “will,” “could,” “should,” “would,” “expect,” “intend,” “plan,” “goal,” “contemplate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “seek,” “strategy,” “future,” “likely” or the negative or other variations on these words and other similar expressions. These statements, which may include, without limitation, projections regarding our future performance and financial condition, are made on the basis of management’s current views and assumptions with respect to future events. These statements speak only as of the date they were made, and we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. We operate in a changing environment where new risks emerge from time to time and it is not possible for us to predict all risks that may affect us. Our ability and willingness to repurchase shares under the proposed repurchase program are subject to risks and uncertainties including, without limitation: our ability to successfully execute and implement our capital plans and to maintain sufficient holding company liquidity to meet our liquidity needs; our ability to successfully execute and implement our business plans and strategies; our ability to maintain an adequate level of capital in our insurance subsidiaries to satisfy existing and future regulatory requirements; and changes in economic, market and political conditions that, among other things, may affect our capital resources, liquidity and financial resources.

For more information regarding these risks and uncertainties as well as certain additional risks that we face, you should refer to “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023, and to subsequent reports and registration statements filed from time to time with the U.S. Securities and Exchange Commission.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240522810869/en/

For Investors:

Dan Kobell - Phone: 215.231.1113

email: daniel.kobell@radian.com

For the Media:

Rashi Iyer - Phone 215.231.1167

email: rashi.iyer@radian.com

Source: Radian Group Inc.

FAQ

What is the new share repurchase authorization for Radian (RDN)?

Radian's share repurchase authorization has been increased from $300 million to $900 million.

When does Radian's expanded share repurchase program expire?

The share repurchase program is extended to June 30, 2026.

How many shares has Radian (RDN) repurchased as of March 31, 2024?

Radian has repurchased approximately 7 million shares for a total cost of $183 million.

What is the amount of Radian's approved quarterly dividend?

Radian has approved a quarterly dividend of $0.245 per share.

When is the dividend payment date for Radian's (RDN) quarterly dividend?

The dividend is payable on June 20, 2024.

What is the record date for Radian's (RDN) quarterly dividend?

The record date for the dividend is June 4, 2024.