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MGIC Investment
(NYSE:MTG)
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Rating:81Outperform
Price Target:
$35.00
▲(18.04% Upside)
Action:Reiterated
Date:07/30/26
The score is driven primarily by strong fundamental quality (profitability, cash flow, and conservative leverage) and an attractive valuation (low P/E with a dividend). Technicals are supportive with price above major moving averages. The earnings call was broadly constructive on profitability, expense discipline, and capital flexibility, but higher delinquencies, modest growth, and aggressive capital returns versus earnings temper the upside.
Positive Factors
Strong cash generation
Very high and consistent operating and free cash flow with near-100% cash conversion demonstrates durable earnings quality. This cash generation supports reserve builds, underwriting volatility absorption, and funds capital returns or reinvestment without relying on new equity issuance.
Negative Factors
Sharp TTM revenue decline
A very large trailing‑twelve‑month revenue decline is a structural risk: sustained top‑line contraction can compress underwriting economics, reduce earned premium runway, and limit the firm's ability to organically grow earnings and rebuild capital buffers over several quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation
Very high and consistent operating and free cash flow with near-100% cash conversion demonstrates durable earnings quality. This cash generation supports reserve builds, underwriting volatility absorption, and funds capital returns or reinvestment without relying on new equity issuance.
Read all positive factors
MGIC Investment (MTG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.21B
Dividend Yield2.04%
Average Volume (3M)1.85M
Price to Earnings (P/E)9.5
Beta (1Y)0.53
Revenue Growth-1.88%
EPS Growth4.83%
CountryUS
Employees542
SectorFinancial
Sector Strength70
IndustryInsurance - Specialty
Share Statistics
EPS (TTM)3.21
Shares Outstanding205,124,850
10 Day Avg. Volume1,844,928
30 Day Avg. Volume1,845,201
Financial Highlights & Ratios
PEG Ratio1.08
Price to Book (P/B)1.28
Price to Sales (P/S)5.43
P/FCF Ratio7.74
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$31.25Price Target Upside5.40% Upside
Rating ConsensusHold
Number of Analyst Covering5
EPS Forecast (FY)3.16
Revenue Forecast (FY)$1.19B
MGIC Investment Business Overview & Revenue Model
Company Description
MGIC Investment Corporation, through its various subsidiaries, provides private mortgage insurance alongside a range of other mortgage credit risk management solutions and ancillary services. These offerings are available to lenders and government...
How the Company Makes Money
MGIC primarily makes money by writing private mortgage insurance (PMI) on eligible residential mortgage loans and collecting premiums over the life of those insurance policies. Its core revenue stream is net premiums earned: (1) MGIC charges premi...
MGIC Investment Earnings Call Summary
Earnings Call Date:Jul 29, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 04, 2026
Earnings Call Sentiment Positive
The call emphasized strong profitability, disciplined expense management, meaningful capital flexibility through an expanded reinsurance program, and continued capital returns to shareholders. Credit metrics showed some normalization with a moderate year-over-year rise in delinquencies and slightly lower persistency and premium yields, but management highlighted favorable reserve development, low early payment defaults, and confidence in underwriting. Insurance-in-force growth remains modest given market constraints. Overall, positive operational and capital-management developments outweighed the moderate credit and growth headwinds.Positive Updates
Solid Profitability and ROE
Net income of $182 million in Q2 2026 (EPS $0.86) with an annualized return on equity of 14.5% and EPS up from $0.81 a year ago.
Negative Updates
Delinquency Rate Trending Higher Year-over-Year
Count-based delinquency rate increased 16 basis points year-over-year to 2.37% (despite a 7 basis-point q/q decline driven by seasonality). Management expects seasonality to increase delinquencies in the second half of the year.
Read all updates
Q2-2026 Updates
Positive
Negative
Solid Profitability and ROE
Net income of $182 million in Q2 2026 (EPS $0.86) with an annualized return on equity of 14.5% and EPS up from $0.81 a year ago.
Read all positive updates
Company Guidance
Management's guidance emphasized disciplined capital and expense management: operating expenses are now expected toward the low end of the $190–$200 million full‑year range, and underwriting continues to use a 7.5% initial claim‑rate assumption on new delinquency notices with seasonality expected to push delinquencies higher in H2 (Q2 count‑based delinquency fell 7 bps to 2.37%, +16 bps YoY and 43 bps below Q2‑2019); in‑force premium yield was ~38 bps and is expected to track similarly, investment book yield is ~4% (Q2 investment income $59M), and Q2 underwriting and other expenses were $46M (down from $52M). Capital guidance highlighted $6.0B of balance‑sheet capital, a reinsurance program that reduced PMIERs required assets by ~$3.1B (≈52%) and an XOL providing up to $168M protection on eligible 2027 NIW; Q2 NIW was $18B (+8.5% YoY), insurance in force $305B (+2.6% YoY), net income $182M (EPS $0.86, annualized ROE 14.5%), book value per share $24.27 (+10% YoY), and capital return plans include ongoing buybacks (6.6M shares/$177M in Q2; $746M repurchased over the prior four quarters) and dividends (Q2 dividend 15¢, recently increased to $0.17 quarterly after $135M paid prior four quarters; combined repurchases+dividends were 124% of net income over that period).MGIC Investment Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
82
Very Positive
Cash Flow
86
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.20B | 1.21B | 1.21B | 1.16B | 1.17B | 1.19B |
| Gross Profit | 1.10B | 1.15B | 1.21B | 1.17B | 1.41B | 1.11B |
| EBITDA | 922.41M | 971.09M | 1.02B | 974.36M | 1.19B | 939.15M |
| Net Income | 707.85M | 738.35M | 762.99M | 712.95M | 865.35M | 634.98M |
Balance Sheet | ||||||
| Total Assets | 6.53B | 6.64B | 6.55B | 6.54B | 6.21B | 7.33B |
| Cash, Cash Equivalents and Short-Term Investments | 5.91B | 6.16B | 6.08B | 6.09B | 5.74B | 6.87B |
| Total Debt | 646.87M | 646.14M | 644.67M | 643.20M | 662.81M | 1.15B |
| Total Liabilities | 1.51B | 1.49B | 1.37B | 1.47B | 1.57B | 2.46B |
| Stockholders Equity | 5.01B | 5.15B | 5.17B | 5.07B | 4.64B | 4.86B |
Cash Flow | ||||||
| Free Cash Flow | 706.48M | 851.77M | 723.86M | 710.96M | 646.76M | 692.20M |
| Operating Cash Flow | 708.02M | 852.80M | 725.03M | 712.96M | 650.01M | 696.32M |
| Investing Cash Flow | 119.57M | 228.37M | -142.00M | -179.19M | 410.49M | -160.75M |
| Financing Cash Flow | -911.38M | -940.28M | -719.04M | -496.04M | -1.03B | -527.29M |
MGIC Investment Technical Analysis
Positive
29.65
Price Trends
27.89
Positive
27.19
Positive
27.17
Positive
Market Momentum
0.71
Positive
63.90
Neutral
32.89
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MTG, the sentiment is Positive. The current price of 29.65 is below the 20-day moving average (MA) of 29.78, above the 50-day MA of 27.89, and above the 200-day MA of 27.17, indicating a bullish trend. The MACD of 0.71 indicates Positive momentum. The RSI at 63.90 is Neutral, neither overbought nor oversold. The STOCH value of 32.89 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MTG.
MGIC Investment Risk Analysis
MGIC Investment disclosed 28 risk factors in its most recent earnings report. MGIC Investment reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
MGIC Investment Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
85 Outperform | $6.08B | 9.35 | 11.91% | 2.01% | 4.47% | 4.26% | |
84 Outperform | $6.67B | 10.30 | 12.76% | 1.86% | 2.49% | 7.73% | |
82 Outperform | $3.32B | 8.55 | 15.14% | ― | 7.53% | 7.71% | |
81 Outperform | $6.21B | 9.45 | 13.90% | 2.02% | -1.88% | 4.83% | |
76 Outperform | $4.83B | 9.18 | 11.81% | 2.64% | 27.93% | -2.18% | |
71 Outperform | $7.37B | 9.97 | 13.62% | 2.93% | 22.55% | 298.19% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% |
* Financial Sector Average
MTG
MGIC Investment
30.35
3.44
12.77%
FAF
First American Financial
71.69
9.35
15.00%
RDN
Radian Group
36.36
2.71
8.07%
ESNT
Essent Group
67.62
6.94
11.44%
NMIH
NMI Holdings
44.40
4.75
11.98%
ACT
Enact Holdings
49.12
12.21
33.09%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.