Radian Group (RDN) Expands Share Repurchase Authorization
Zacks Investment Research | Mar 22, 2019 05:50AM ET
The board of directors of Radian Group Inc. (NYSE:RDN) has approved a share buyback program, which takes the total authorization to $250 million. The company may buy back the shares through Jul 31, 2020.
The latest approval of $150 million is in addition to the company’s existing share repurchase, taking the total authorization to $250 million from 100 million.
On Aug 16, 2018, the board of directors had approved a share buyback program under which the company could repurchase up to $100 million shares by July 2019. As of Dec 31, 2018, the full authorization was available.
A sturdy financial position backed by solid core operations enables the company to generate enough capital. In its effort to optimize capital and liquidity position, the Zacks Rank #3 (Hold) insurer bought back more than 3 million shares in 2018, exhausting the $50 million buyback authorization approved on Aug 9, 2017. The company had about 218.6 million shares outstanding as of 2018 end.
Radian Group’s liquidity increased after Radian Guaranty returned $450 million in December 2018, as approved by the Pennsylvania Insurance Department. This distribution of capital is part of the company’s long-term capital plan intended to improve its financial flexibility and capital position.
Share repurchases benefit the company’s earnings per share, book value as well as shareholder equity.
Shares of Radian Group have gained 14.4% in a year’s time against the Zacks Investment Research
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