FNMA vs RDN: Which Is the Better Buy in 2026?

Same yardstick, side by side (as of August 2026). Valuation lined up like this is most meaningful for two names in the same corner of the market, which these are. Figures are approximate; verify before investing.

The metrics above tell you which is the marginally better business. The bigger risk for most people is not picking the slightly worse stock, it is over-concentrating. FNMA and RDN share themes, so owning both, or adding either to what you already hold, can quietly push a large share of your portfolio into one bet.

This is the part a generic comparison page cannot answer, because it depends on what you own. Connect your brokerage and Walnut shows your real, combined FNMA and RDN exposure, flags overlap with your existing positions, and tells you if adding one would tip you past a concentration you are comfortable with, read-only by default, with your login staying at your broker. Walnut is not an investment adviser.

Fannie Mae, formally the Federal National Mortgage Association, is a government-sponsored enterprise that sits at the center of the US housing finance system. It buys mortgages from lenders, packages them into mortgage-backed securities, and guarantees timely payment of principal and interest to investors, which keeps mortgage credit flowing and supports the 30-year fixed-rate loan. Fannie Mae does not originate loans directly; it makes most of its money from guaranty fees charged for taking on the credit risk of the loans it backs, earning a recurring stream across a guaranty book of business of roughly $4 trillion. The company reported full-year 2025 net income of about $14.4 billion and ended 2025 with net worth of about $109 billion, its fourteenth straight profitable year.

Full FNMA guide

Radian Group runs two operating segments after a year of restructuring. The Mortgage segment, written through Radian Guaranty, sells private mortgage insurance to lenders on conventional loans where the borrower puts down less than 20 percent. The insurer collects a monthly or single premium and pays a claim if the loan defaults and the property sells for less than the outstanding balance. Scale is measured in insurance in force rather than in revenue: ~$284 billion of primary insurance in force at June 30, 2026, sitting on ~$75.4 billion of risk in force, produced ~$474.5 million of net premiums earned in the first half. The Specialty segment is Inigo, the Lloyd's of London underwriter Radian bought for ~$1.67 billion on February 2, 2026, which writes property, casualty, marine, energy and other specialty lines through Syndicate 1301 and contributed ~$431.7 million of net premiums earned over the same six months. Three other businesses are on their way out. Real Estate Services was sold to PLACE in August 2026, the title insurance business is under a definitive agreement expected to close in the fourth quarter, and the mortgage conduit has been substantially wound down, all three carried as discontinued operations.

Full RDN guide

Both fit overlapping themes, but they are not interchangeable. The useful comparison is which set of drivers and risks you want exposure to.

• FNMA drivers: Recap-and-release thesis; Durable, fee-based core business.
• RDN drivers: The in-force book runs on persistency, not new sales; Half the premium now comes from a Lloyd's syndicate.

A faster-growing, richer-valued name usually swings harder, so it suits a longer horizon and a higher tolerance for volatility; a steadier, more cash-generative business suits a more conservative or income-minded investor. The honest test is which set of risks you could hold through a drawdown: FNMA common is highly speculative and the risks are unusually severe. For RDN, the Specialty segment ran a ~93.0 percent combined ratio in the first half of 2026, which leaves thin margin before an underwriting loss, and Lloyd's syndicates carry catastrophe exposure that arrives in lumps rather than in trend lines.

Growth-minded investors who believe the theme has years to run tend to accept the richer multiple for more upside; value-minded investors lean toward the cheaper forward earnings and steadier profile. Pick FNMA if you believe its drivers more; RDN if you believe its. Many investors hold both, but since they share themes, that is a concentrated bet, not diversification. Decide deliberately and check overlap. For the full detail, see the FNMA and RDN guides.

FNMA. FNMA common is unusual to value with normal metrics. Even though Fannie Mae earns billions and holds more than $100 billion of net worth, almost none of that currently accrues to common holders: Treasury sits ahead of them with senior preferred stock whose liquidation preference exceeds $200 billion, and it holds warrants for about 79.9% of the common. The roughly $8 billion market cap is therefore not a claim on current earnings or book value but a market-implied probability that the company exits conservatorship on terms that leave value for the common after Treasury's stake is satisfied. Standard price-to-earnings or price-to-book analysis does not capture this; the price is effectively pricing a political and legal outcome.

RDN. Insurance holding companies are read on book value and return on equity, so the ~2.9 times sales multiple a screener prints for RDN carries almost no information about what the business is worth. At ~1.02 times book the stock sits at the low end of the ~0.9 to ~1.3 times range US mortgage insurers have generally occupied, while the forward multiple of ~7.3 times already embeds the mid-teens EPS accretion management guided to from Inigo. Whether the discount reflects the delinquency cycle, the ~93 percent specialty combined ratio, or the change of chief executive is the open argument.

Headline figures (approximate, FY2025 results (year ended Dec 31, 2025) and Q1 2026): FNMA shows net income (fy2025) ~$14.4 billion, net income (q1 2026) ~$3.7 billion, net worth ~$109B (end 2025); ~$112.7B (Q1 2026), treasury senior preferred Liquidation preference well over $200 billion and growing; RDN shows revenue (ttm) ~$1.65 billion for the twelve months to June 30, 2026, up ~37.5 percent, against ~$1.197 billion in fiscal 2025, ~$1.206 billion in 2024 and ~$1.177 billion in 2023. The increase is acquired rather than organic: it represents roughly five months of Inigo, consolidated from February 2, 2026. Second-quarter revenue alone was ~$575 million, up ~93 percent year over year, on net premiums earned of ~$504 million (up ~115.7 percent) and net investment income of ~$70 million (up ~21.1 percent). First-half 2026 total revenue was ~$1.041 billion., earnings and eps Net income of ~$536 million for the twelve months to June 30, 2026, down ~8.6 percent, for diluted EPS of ~$3.89 against ~$4.14 in 2025, ~$3.92 in 2024 and ~$3.77 in 2023. First-half 2026 net income was ~$240.0 million, split between ~$247.7 million from continuing operations and a ~$7.7 million loss from discontinued ones. The second quarter produced ~$118 million, or ~$0.87 diluted, from continuing operations, with adjusted diluted net operating income of ~$1.14 per share., segment mix and operating metrics In the first half of 2026 the Mortgage segment earned ~$474.5 million of net premiums at a ~33.0 percent combined ratio, while the Specialty segment earned ~$431.7 million at a ~93.0 percent combined ratio that still carries integration and purchase-accounting effects. Primary mortgage insurance in force reached a record ~$284 billion at June 30, 2026, up ~3 percent, on ~$75.4 billion of risk in force. New insurance written was ~$16.3 billion in the quarter, up ~14 percent. Persistency was ~82 percent, up ~70 basis points, and the primary default rate ~2.47 percent versus ~2.27 percent a year earlier., balance sheet and regulatory capital Total assets of ~$10.66 billion at June 30, 2026, up ~31 percent on the acquisition, with shareholders' equity of ~$4.8 billion and reserves for losses and loss adjustment expense of ~$1.91 billion. Total debt was ~$1.345 billion, up from ~$1.193 billion at year-end 2025, and ~$600 million of the Inigo purchase price came from a 10-year, 6.50 percent intercompany note issued by Radian Guaranty. Book value per share was ~$36.00, up ~8.5 percent year over year. Radian Guaranty held ~$1.5 billion of available assets above its PMIERs minimum..

FNMA and RDN are related but distinct: same themes, different businesses and risks. Neither wins in the abstract; the right pick is whichever thesis you actually believe, sized so you are not over-concentrated in one theme. Walnut can show your combined FNMA and RDN exposure against your real portfolio. It is not an investment adviser.