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MGIC Investment (MTG)
NYSE:MTG
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MGIC Investment (MTG) AI Stock Analysis

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MTG

MGIC Investment

(NYSE:MTG)

Rating:75Outperform
Price Target:
$29.00
▲(1.97% Upside)
MGIC Investment's strong financial performance and undervaluation are significant positives, contributing to a solid overall score. Despite mixed technical indicators and challenges in the housing market, the company's robust capital management and shareholder returns enhance its attractiveness. The absence of notable corporate events does not impact the score.
Positive Factors
Business Performance
New insurance written significantly exceeded expectations, indicating strong business performance without relying on price cuts.
Capital Return
MGIC has been actively returning capital to shareholders through share repurchases and dividends.
Earnings
MGIC Investment Corp reported a quarterly EPS above expectations, driven by favorable loss reserve development.
Negative Factors
Expenses
The expectation that loss and LAE expenses will increase over time could pressure MTG's earnings.
Interest Rates
Higher interest rates have led to slow insurance in force growth, which is expected to continue, putting pressure on MTG's earnings potential.
Revenue
Total revenues slightly missed forecasts, with both insurance in-force and investment income coming in below expectations.

MGIC Investment (MTG) vs. SPDR S&P 500 ETF (SPY)

MGIC Investment Business Overview & Revenue Model

Company DescriptionMGIC Investment Corporation, through its subsidiaries, provides private mortgage insurance, other mortgage credit risk management solutions, and ancillary services to lenders and government sponsored entities in the United States, Puerto Rico, and Guam. The company offers primary mortgage insurance that provides mortgage default protection on individual loans, as well as covers unpaid loan principal, delinquent interest, and various expenses associated with the default and subsequent foreclosure. It also provides contract underwriting services, as well as reinsurance. The company serves originators of residential mortgage loans, including savings institutions, commercial banks, mortgage brokers, credit unions, mortgage bankers, and other lenders. MGIC Investment Corporation was founded in 1957 and is headquartered in Milwaukee, Wisconsin.
How the Company Makes MoneyMGIC generates revenue primarily through the sale of mortgage insurance premiums. When a lender issues a mortgage that exceeds a certain loan-to-value ratio, they may require the borrower to obtain mortgage insurance to mitigate the risk of default. MGIC charges these lenders premiums for coverage, which can be collected as a one-time upfront payment or as monthly installments throughout the life of the loan. Additionally, MGIC earns income through investment returns on its reserves and capital, which are allocated to cover potential future claims. The company may also engage in reinsurance arrangements or partnerships with other financial institutions to share risk and enhance its offerings. The stability of MGIC's revenue model is significantly influenced by housing market conditions, interest rates, and regulatory changes affecting the mortgage industry.

MGIC Investment Earnings Call Summary

Earnings Call Date:Jul 30, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Oct 29, 2025
Earnings Call Sentiment Neutral
MGIC's earnings call presented a strong financial performance with significant share repurchases and dividends, alongside a stable insurance portfolio. However, they face challenges in the housing market and investment income stagnation, with potential increases in delinquency rates due to economic factors.
Q2-2025 Updates
Positive Updates
Strong Financial Performance
MGIC reported a net income of $193 million with an annualized return on equity of 15%, reflecting disciplined market approaches and risk management strategies.
High Persistency and Insurance in Force
The insurance in force remained at $297 billion with an annual persistency of 85%, indicating stability and alignment with expectations.
Effective Capital Management
MGIC repurchased 7.1 million shares for $181 million and paid $31 million in dividends, with a total payout of 112% on net income over the last four quarters.
Strong Credit Performance
The portfolio exhibited strong credit characteristics, with favorable loss reserve developments of $54 million due to higher-than-expected cure rates on delinquencies.
Increase in Book Value
Book value per share increased by 13% year-over-year to $22.11.
Negative Updates
Challenges in Housing Market
Elevated interest rates and affordability challenges are causing a slowdown in home sales, limiting growth in insurance in force.
Flat Investment Income
Net investment income remained flat at $61 million, with overall book yield expectations to remain flat due to a decline in short-term interest rates and capital return levels.
Potential Increase in Delinquency Rates
While the delinquency rate decreased to 2.21%, forecasts suggest an increase in delinquency rates in the second half of the year due to seasonality and aging of 2021 and 2022 vintages.
Operational Expense Challenges
Operating expenses included a $4 million accounting charge related to pension plan settlements, with expectations of further charges in the future.
Company Guidance
During the MGIC Investment Corporation's second quarter 2025 earnings call, guidance highlighted several key financial metrics and strategic priorities. The company reported a net income of $193 million, with an annualized return on equity of 15%. New insurance written during the quarter amounted to $16 billion, while insurance in force totaled $297 billion, maintaining an annual persistency rate of 85%. MGIC executed share repurchases totaling 7.1 million shares for $181 million and paid a quarterly common stock dividend of $0.13 per share, amounting to $31 million. Over the last four quarters, these shareholder returns represented a 112% payout of net income. The guidance also reiterated the intent to continue using share repurchases as the primary method of returning capital to shareholders. Moreover, the company's book value per share rose to $22.11, an increase of 13% year-over-year. MGIC's operating expenses were reported at $52 million for the quarter, and the fiscal guidance for the full year remains at $195 million to $205 million. The company discussed its strategic focus on maintaining strong capital and risk management strategies, including reinsurance to reduce volatility and enhance financial resilience.

MGIC Investment Financial Statement Overview

Summary
MGIC Investment shows strong financial health with consistent revenue growth and high profitability. The balance sheet is extremely stable with no debt, enhancing financial security. Cash flow metrics indicate robust cash generation capabilities. However, the absence of EBIT and EBITDA metrics for the latest period slightly limits the assessment of operational efficiency.
Income Statement
74
Positive
MGIC Investment showed robust revenue growth, increasing from $1,155.1 million in 2023 to $1,207.7 million in 2024. The company achieved a high net profit margin of 63.17% in 2024, indicating strong profitability. However, the absence of EBIT and EBITDA figures for 2024 limits the assessment of operating efficiency.
Balance Sheet
88
Very Positive
The company's financial position is strong with a debt-free status as of 2024 and a high equity ratio of 88.34%, showing high stability and low financial risk. The return on equity in 2024 was 14.75%, which indicates effective use of equity to generate profits.
Cash Flow
82
Very Positive
MGIC Investment reported a healthy free cash flow growth from $710.9 million in 2023 to $723.9 million in 2024, indicating strong cash generation. The operating cash flow to net income ratio was 0.95, demonstrating efficient conversion of income to cash flow.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue1.22B1.21B1.16B1.17B1.19B1.20B
Gross Profit1.15B1.21B929.10M936.09M987.23M1.02B
EBITDA771.80M1.00B974.36M1.19B939.15M676.67M
Net Income762.61M762.99M712.95M865.35M634.98M446.09M
Balance Sheet
Total Assets6.49B6.55B6.54B6.21B7.33B7.35B
Cash, Cash Equivalents and Short-Term Investments298.89M6.08B363.67M327.38M284.69M287.95M
Total Debt645.40M644.67M643.20M662.81M1.15B1.24B
Total Liabilities1.33B1.36B1.47B1.57B1.15B1.24B
Stockholders Equity5.15B5.17B5.07B4.64B4.86B4.70B
Cash Flow
Free Cash Flow770.86M723.86M710.96M646.76M692.20M729.00M
Operating Cash Flow771.90M725.03M712.96M650.01M696.32M732.31M
Investing Cash Flow119.19M-142.00M-179.19M410.49M-160.75M-772.51M
Financing Cash Flow-880.01M-719.04M-496.04M-1.03B-527.29M167.82M

MGIC Investment Technical Analysis

Technical Analysis Sentiment
Positive
Last Price28.44
Price Trends
50DMA
26.80
Positive
100DMA
26.25
Positive
200DMA
25.14
Positive
Market Momentum
MACD
0.43
Negative
RSI
66.89
Neutral
STOCH
79.37
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 28.44 is above the 20-day moving average (MA) of 27.66, above the 50-day MA of 26.80, and above the 200-day MA of 25.14, indicating a bullish trend. The MACD of 0.43 indicates Negative momentum. The RSI at 66.89 is Neutral, neither overbought nor oversold. The STOCH value of 79.37 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 15 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

Overall Rating
UnderperformOutperform
Sector (68)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
84
Outperform
$5.53B8.5113.47%2.11%3.15%5.70%
83
Outperform
$3.04B8.4116.91%9.99%11.47%
81
Outperform
$6.17B9.1312.94%1.92%4.79%-0.76%
78
Outperform
$4.70B8.7313.07%2.88%0.24%3.14%
75
Outperform
$6.42B9.1214.85%1.93%3.26%12.70%
68
Neutral
$18.05B11.7310.24%3.73%9.66%1.70%
65
Neutral
$6.56B35.573.80%3.35%14.28%-2.87%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
MTG
MGIC Investment
28.44
4.05
16.61%
FAF
First American Financial
66.27
3.43
5.46%
RDN
Radian Group
35.01
1.07
3.15%
ESNT
Essent Group
63.80
2.46
4.01%
NMIH
NMI Holdings
40.10
-0.47
-1.16%
ACT
Enact Holdings
37.76
2.85
8.16%

MGIC Investment Corporate Events

Executive/Board Changes
MGIC Investment Announces CIO Departure and Severance
Neutral
Jun 13, 2025

On June 11, 2025, Robert J. Candelmo, the Senior Vice President and Chief Information Officer, was separated from service with Mortgage Guaranty Insurance Corporation. His departure will include severance benefits as per the company’s Executive Severance Plan, indicating a potential shift in the company’s executive structure.

The most recent analyst rating on (MTG) stock is a Buy with a $30.00 price target. To see the full list of analyst forecasts on MGIC Investment stock, see the MTG Stock Forecast page.

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.Date of analysis: Aug 01, 2025