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MGIC Investment (MTG)
NYSE:MTG
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MGIC Investment
(NYSE:MTG)
Select Model
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Rating:78Outperform
Price Target:
$31.00
▲(3.82% Upside)
MGIC Investment's strong financial performance and positive earnings call are the most significant factors contributing to its high score. The company's robust balance sheet, high profitability, and effective capital returns highlight its financial strength. However, technical indicators suggest a neutral trend, and potential challenges such as increased competition and higher operating expenses could impact future performance.
Positive Factors
Strong Financial Health
MGIC's debt-free status and high equity ratio indicate financial stability and low risk, supporting long-term operational resilience and growth potential.
Effective Capital Management
Strong capital management through share repurchases and dividends enhances shareholder value and reflects confidence in future cash flow generation.
High Persistency and Insurance in Force
High persistency rates and stable insurance in force demonstrate MGIC's ability to maintain customer relationships and revenue streams over time.
Negative Factors
Challenges in Housing Market
The slowdown in home sales due to high interest rates could restrict MGIC's growth in new insurance policies, impacting long-term revenue potential.
Flat Investment Income
Flat investment income limits MGIC's ability to leverage its reserves for additional revenue, potentially affecting profitability and cash flow.
Potential Increase in Delinquency Rates
Rising delinquency rates could increase claims and reduce profitability, posing a risk to MGIC's financial stability and insurance portfolio quality.
MGIC Investment (MTG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.58B
Dividend Yield1.9%
Average Volume (3M)1.43M
Price to Earnings (P/E)9.5
Beta (1Y)0.58
Revenue Growth2.20%
EPS Growth9.90%
CountryUS
Employees555
SectorFinancial
Sector Strength70
IndustryInsurance - Specialty
Share Statistics
EPS (TTM)0.83
Shares Outstanding223,740,980
10 Day Avg. Volume1,650,734
30 Day Avg. Volume1,434,522
Financial Highlights & Ratios
PEG Ratio0.51
Price to Book (P/B)1.20
Price to Sales (P/S)5.14
P/FCF Ratio8.57
Enterprise Value/Market Cap1.10
Enterprise Value/Revenue5.93
Enterprise Value/Gross Profit6.10
Enterprise Value/Ebitda7.24
Forecast
1Y Price Target
$28.67Price Target Upside-3.99% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering3
EPS Forecast (FY)3.11
Revenue Forecast (FY)$1.22B
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 lenders require mortgage insurance for loans with low down payments, they pay premiums to MGIC. This creates a steady stream of income for the company. Additionally, MGIC earns money through investment income generated from its portfolio of invested premiums and reserves. The company also benefits from reinsurance arrangements, which allow it to manage risk effectively while enhancing its revenue potential. Key partnerships with mortgage lenders and brokers play a crucial role in expanding MGIC's market reach, further driving revenue growth. Overall, the company's earnings are influenced by housing market conditions, default rates, and broader economic factors.
MGIC Investment Earnings Call Summary
Earnings Call Date:Oct 29, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Feb 04, 2026
Earnings Call Sentiment Positive
MGIC reported strong financial results with significant capital returns and a record insurance in-force, showing leadership and stability. However, increased delinquency rates, higher operating expenses, and potential increased competition were noted as challenges.Q3-2025 Updates
Positive Updates
Strong Financial Results
MGIC reported net income of $191 million and an annualized return on equity of 14.8%. Earnings per share increased to $0.83 from $0.77 in the same period last year.
Significant Capital Returns
MGIC returned $980 million of capital to shareholders through dividends and share repurchases over the last year, reducing outstanding shares by 12%.
Record Insurance In-Force
MGIC ended the quarter with over $300 billion of insurance in-force, an industry first and a significant milestone reflecting historical leadership in the market.
Reinsurance Program Enhancements
The reinsurance program reduced PMIERs required assets by $2.5 billion or approximately 43%, with additional transactions set to bolster future success.
Investment Income Stability
Investment income was $62 million with a book yield of 4%, remaining stable and contributing meaningly to revenue.
Negative Updates
Increased Delinquency Rate
Count-based delinquency rate increased by 11 basis points to 2.32%, with expectations of further increases due to seasonality and aging of book years.
Operating Expenses
Operating expenses are expected to be towards the higher end of the $195 million to $205 million range due to pension settlement charges.
Potential Increased Competition
Discussion regarding potential new entrants into the MI space, which could lead to increased competition in the future.
Company Guidance
During MGIC Investment Corporation's Third Quarter 2025 Earnings Call, the company provided a robust set of financial metrics demonstrating its strong performance. MGIC reported a net income of $191 million and an annualized return on equity of 14.8% for the quarter. The company achieved a significant milestone with over $300 billion of insurance in-force, reflecting its leadership in the market. MGIC's book value per share increased by 11% to $22.87 compared to the previous year. In terms of capital return, the company returned $980 million to shareholders through dividends and share repurchases, reducing outstanding shares by 12%. The quarter also saw $188 million in share repurchases and a $0.15 per share dividend totaling $34 million. Over the last four quarters, the share repurchase totaled $786 million, and shareholder dividends totaled $132 million, marking a 122% payout of the net income. MGIC's reinsurance program reduced PMIERs required assets by approximately 43%, and the company maintained an in-force premium yield of 38.3 basis points. Operating expenses were $50 million for the quarter, with a full-year expectation to fall within the $195 million to $205 million range.MGIC Investment Financial Statement Overview
Summary
MGIC Investment exhibits strong financial health with consistent revenue growth and high profitability. The balance sheet reflects excellent stability with no debt as of 2024, enhancing financial security. Cash flow metrics indicate robust cash generation capabilities. However, the lack of EBIT and EBITDA metrics for the latest period slightly limits the evaluation of operational efficiency.Income Statement
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.74
Positive
Balance Sheet
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.88
Very Positive
Cash Flow
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.82
Very Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.22B | 1.21B | 1.16B | 1.17B | 1.19B | 1.20B |
| Gross Profit | 1.18B | 1.21B | 1.17B | 1.41B | 1.11B | 821.99M |
| EBITDA | 996.30M | 1.02B | 974.36M | 1.19B | 939.15M | 676.67M |
| Net Income | 753.74M | 762.99M | 712.95M | 865.35M | 634.98M | 446.09M |
Balance Sheet | ||||||
| Total Assets | 6.63B | 6.55B | 6.54B | 6.21B | 7.33B | 7.35B |
| Cash, Cash Equivalents and Short-Term Investments | 271.79M | 6.08B | 6.09B | 5.74B | 6.87B | 6.95B |
| Total Debt | 0.00 | 644.67M | 643.20M | 662.81M | 1.15B | 1.24B |
| Total Liabilities | 1.45B | 1.37B | 1.47B | 1.57B | 2.46B | 2.66B |
| Stockholders Equity | 5.17B | 5.17B | 5.07B | 4.64B | 4.86B | 4.70B |
Cash Flow | ||||||
| Free Cash Flow | 803.49M | 723.86M | 710.96M | 646.76M | 692.20M | 729.00M |
| Operating Cash Flow | 804.42M | 725.03M | 712.96M | 650.01M | 696.32M | 732.31M |
| Investing Cash Flow | 113.06M | -142.00M | -179.19M | 410.49M | -160.75M | -772.51M |
| Financing Cash Flow | -945.30M | -719.04M | -496.04M | -1.03B | -527.29M | 167.82M |
MGIC Investment Technical Analysis
Positive
29.86
Price Trends
27.86
Positive
27.71
Positive
26.41
Positive
Market Momentum
0.41
Negative
71.58
Negative
88.17
Negative
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 29.86 is above the 20-day moving average (MA) of 28.54, above the 50-day MA of 27.86, and above the 200-day MA of 26.41, indicating a bullish trend. The MACD of 0.41 indicates Negative momentum. The RSI at 71.58 is Negative, neither overbought nor oversold. The STOCH value of 88.17 is Negative, 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
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $5.84B | 9.29 | 12.75% | 2.01% | 2.40% | 1.18% | |
79 Outperform | $3.11B | 8.74 | 16.17% | ― | 8.86% | 9.51% | |
78 Outperform | $6.58B | 9.45 | 14.40% | 1.90% | 2.20% | 9.90% | |
74 Outperform | $6.49B | 13.69 | 9.28% | 3.41% | 25.99% | 426.44% | |
73 Outperform | $6.40B | 9.64 | 12.35% | 1.87% | 2.78% | -0.50% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
66 Neutral | $4.94B | 9.11 | 12.56% | 2.76% | -3.68% | 3.65% |
* Financial Sector Average
MTG
MGIC Investment
29.86
6.70
28.93%
FAF
First American Financial
63.89
3.23
5.32%
RDN
Radian Group
36.97
5.86
18.84%
ESNT
Essent Group
66.82
14.67
28.13%
NMIH
NMI Holdings
41.81
5.27
14.42%
ACT
Enact Holdings
40.62
8.63
26.98%
MGIC Investment Corporate Events
Executive/Board Changes
MGIC Investment Appoints New Board Members
Neutral
Oct 23, 2025
On October 22, 2025, MGIC Investment Corporation’s Board of Directors elected Martin P. Klein and Daniela A. O’Leary-Gill as new members. Mr. Klein, with extensive experience in financial roles at Athene Holdings LTD and Genworth Financial, joins the Risk Management and Securities Investment Committees. Ms. O’Leary-Gill, who has held senior roles at BMO Financial Group and Discover Financial Services, joins the Audit and Business Transformation & Technology Committees. On October 31, 2025, both will receive restricted stock units valued at $36,302.00 under the MGIC Investment Corporation Deferred Compensation Plan for Non-Employee Directors, reflecting a pro-rated annual grant for non-management directors.
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.