Radian Divests Clayton EuroRisk To Focus On Core Service

Radian Group Inc. (NYSE:RDN) divested its Clayton EuroRisk to a global investment firm. The divestiture is in sync with the company’s strategy to intensify its focus on core service.

Clayton EuroRisk is a provider of outsourced mortgage services in Europe. Henceforth, the company will not provide products and services for its Mortgage and Real Estate Services business in Europe. Radian Group intends to position its Service segment for continued profitability. EBITDA margin for the Services segment is expected in the 10-15% range over time.

Radian Group is restructuring business by increasing its focus on core business and services with higher-growth potential and ensuring more predictable and recurring fee-based revenues. Restructuring cost is estimated to be $20 million, of which, $12 million was recognized in the third quarter itself.

The company remains firmly focused on improving its mortgage insurance portfolio, the main catalyst of long-term earnings growth. It remains committed toward leveraging its core expertise in credit risk management, which will lead to more business written and strengthen the Mortgage Insurance franchise.

Radian Group carries a Zacks Rank #2 (Buy). Shares of Radian Group have rallied 15.6% year to date, outperforming the industry’s gain of 8.8%. The company is poised for long-term growth on declining delinquency, lower levels of paid claims and an improving risk-based capital ratio, reflecting improvement in the operating environment.

Other Stocks to Consider

Investors interested in multiline insurers can also look at other stocks worth considering namely, MGIC Investment Corporation (NYSE:MTG) , MetLife Inc. (NYSE:MET) and Prudential Financial, Inc. (NYSE:PRU) .

MGIC Investment provides private mortgage insurance and ancillary services to lenders and government-sponsored entities in the United States. The company delivered an average four-quarter positive surprise of 27.11%. The stock flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

MetLife provides life insurance, annuities, employee benefits and asset management products in the United States, Japan, Latin America, Asia, Europe and the Middle East. The company came up with an average four-quarter positive surprise of 9.60%. The stock carries a Zacks Rank of 2.

Prudential (LON:PRU) provides insurance, investment management and other financial products and services in the United States and internationally. The Zacks #2 Ranked company pulled off an average four-quarter positive surprise of 0.16%.

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