Radian Group (RDN) Stock Analysis & Winston Score

Radian Group is an insurance company that helps people buy homes with smaller down payments. When a homebuyer puts down less than 20% of a home's price, lenders usually require private mortgage insurance (PMI) — and Radian is one of the largest providers of that insurance in the United States. If a borrower stops making payments and the lender loses money, Radian covers part of that loss. Radian makes money by collecting insurance premiums from mortgage lenders and borrowers over the life of a loan. It operates almost entirely in the United States and competes in a small industry with only a handful of licensed private mortgage insurers, which limits new competition. The biggest risk Radian faces is a rise in mortgage defaults — if home prices fall sharply or unemployment climbs, more borrowers could stop paying, leading to higher claims that eat into profits.