RDN vs PFSI

For growth investors, PennyMac Financial Services, Inc.

(PFSI) is the stronger pick with 173. 8% revenue growth year-over-year, versus 4. 0% for Radian Group Inc. (RDN). Radian Group Inc. (RDN) offers the better valuation at 9. 1x trailing P/E (7. 2x forward), making it the more compelling value choice. Analysts rate Radian Group Inc. (RDN) a "Buy" — based on 22 analyst ratings — the highest consensus in this comparison. The "better buy" depends entirely on your goals: growth investors should weight revenue trajectory, value investors should weight P/E and PEG, and income investors should weight dividend yield and streak.

On trailing P/E, Radian Group Inc.

(RDN) is the cheapest at 9. 1x versus PennyMac Financial Services, Inc. at 9. 4x. On forward P/E, PennyMac Financial Services, Inc. is actually cheaper at 7. 1x — notably different from the trailing picture, reflecting expected earnings growth.

Over the past 5 years, Radian Group Inc.

(RDN) delivered a total return of +69. 8%, compared to +53. 5% for PennyMac Financial Services, Inc. (PFSI). Over 10 years, the gap is even starker: PFSI returned +598. 9% versus RDN's +230. 5%. Past returns do not guarantee future results, and the stock with the higher historical return may already have its best growth priced in.

By beta (market sensitivity over 5 years), Radian Group Inc.

(RDN) is the lower-risk stock at 0. 37β versus PennyMac Financial Services, Inc. 's 0. 93β — meaning PFSI is approximately 148% more volatile than RDN relative to the S&P 500. On balance sheet safety, Radian Group Inc. (RDN) carries a lower debt/equity ratio of 51% versus 5% for PennyMac Financial Services, Inc. — giving it more financial flexibility in a downturn.

By revenue growth (latest reported year), PennyMac Financial Services, Inc.

(PFSI) is pulling ahead at 173. 8% versus 4. 0% for Radian Group Inc. (RDN). On earnings-per-share growth, the picture is similar: PennyMac Financial Services, Inc. grew EPS 59. 2% year-over-year, compared to 4. 0% for Radian Group Inc.. Higher growth typically commands a higher valuation multiple — check whether the premium P/E or P/S is justified by the growth rate using the PEG ratio.

Radian Group Inc.

(RDN) is the more profitable company, earning 46. 8% net margin versus 11. 5% for PennyMac Financial Services, Inc. — meaning it keeps 46. 8% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: RDN leads at 59. 8% versus 34. 6% for PFSI. At the gross margin level — before operating expenses — RDN leads at 95. 1%, reflecting greater pricing power or product mix advantage. Stronger margins indicate durable pricing power, lower cost of revenue, or higher mix of software/services. They are one of the clearest signs of business quality.

On forward earnings alone, PennyMac Financial Services, Inc.

(PFSI) trades at 7. 1x forward P/E versus 7. 2x for Radian Group Inc. — 0. 1x cheaper on a one-year earnings basis. Analyst consensus price targets imply the most upside for PFSI: 63. 5% to $143. 00.

All stocks in this comparison pay dividends.

Radian Group Inc. (RDN) offers the highest yield at 2. 8%, versus 1. 3% for PennyMac Financial Services, Inc. (PFSI).

For long-horizon retirement investors, Radian Group Inc.

(RDN) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding (low volatility (β 0. 37), 2. 8% yield, +230. 5% 10Y return). Both have compounded well over 10 years (RDN: +230. 5%, PFSI: +598. 9%), confirming both are viable long-term holds — but the lower-volatility option typically results in less emotional selling during corrections. Retirement portfolios generally favour predictability over maximum returns. Consult a financial advisor before making allocation decisions.

Both stocks operate in the Financial Services sector, making this a peer-level intra-sector comparison — the same macro tailwinds and headwinds will affect both.

In terms of investment character: RDN is a small-cap deep-value stock; PFSI is a small-cap high-growth stock. These fundamental differences mean investors should not choose between them on a single metric — the "better stock" depends entirely on which of these characteristics aligns with your investment strategy.