PayPal (NASDAQ:PYPL) vs. Radian Group (NYSE:RDN) Head to Head Analysis

Radian Group (NYSE:RDN) and PayPal (NASDAQ:PYPL) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, analyst recommendations, valuation and dividends.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Radian Group	28.41%	14.39%	6.88%
PayPal	13.78%	24.39%	5.97%

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Radian Group and PayPal, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Radian Group	0	3	6	0	2.67
PayPal	6	32	8	0	2.04

Radian Group currently has a consensus price target of $42.57, suggesting a potential upside of 16.47%. PayPal has a consensus price target of $55.97, suggesting a potential downside of 5.58%. Given Radian Group’s stronger consensus rating and higher possible upside, equities analysts clearly believe Radian Group is more favorable than PayPal.

Insider & Institutional Ownership

95.3% of Radian Group shares are owned by institutional investors. Comparatively, 68.3% of PayPal shares are owned by institutional investors. 2.0% of Radian Group shares are owned by insiders. Comparatively, 0.6% of PayPal shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Risk and Volatility

Radian Group has a beta of 0.69, meaning that its share price is 31% less volatile than the S&P 500. Comparatively, PayPal has a beta of 1.33, meaning that its share price is 33% more volatile than the S&P 500.

Valuation & Earnings

This table compares Radian Group and PayPal”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Radian Group	$1.20 billion	3.86	$582.64 million	$4.08	8.96
PayPal	$33.17 billion	1.48	$5.23 billion	$5.24	11.31

PayPal has higher revenue and earnings than Radian Group. Radian Group is trading at a lower price-to-earnings ratio than PayPal, indicating that it is currently the more affordable of the two stocks.

Dividends

Radian Group pays an annual dividend of $1.02 per share and has a dividend yield of 2.8%. PayPal pays an annual dividend of $0.56 per share and has a dividend yield of 0.9%. Radian Group pays out 25.0% of its earnings in the form of a dividend. PayPal pays out 10.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Radian Group has raised its dividend for 6 consecutive years. Radian Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Radian Group beats PayPal on 9 of the 17 factors compared between the two stocks.

About Radian Group

Radian Group Inc. is a mortgage and real estate services company whose primary business is private mortgage insurance. Through its subsidiaries, it provides mortgage insurance to lenders and other housing finance participants in the United States. Mortgage insurance helps protect lenders and investors against losses if borrowers default. It can also support home purchases by allowing qualified borrowers to obtain mortgages with smaller down payments than would otherwise be required. Radian also offers services and solutions related to mortgage risk management.

About PayPal

PayPal Holdings, Inc. operates a global digital payments platform that helps consumers and businesses send and receive payments online and in person. Its services include PayPal checkout and digital wallets, Venmo peer-to-peer payments, Braintree payment processing for merchants, and Xoom international money transfers. The company traces its roots to Confinity, founded in 1998, and the online payments business that developed through its merger with X.com. PayPal became part of eBay in 2002 and was spun off as an independent public company in 2015.