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MGIC Investment (MTG)
NYSE:MTG
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MGIC Investment
(NYSE:MTG)
Rating:79Outperform
Price Target:―
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)
Market Cap
$6.70B
Dividend Yield1.87%
Average Volume (3M)1.89M
Price to Earnings (P/E)9.4
Beta (1Y)0.68
Revenue Growth4.64%
EPS Growth15.36%
CountryUS
Employees555
SectorFinancial
Sector Strength81
IndustryInsurance - Specialty
Share Statistics
EPS (TTM)0.75
Shares Outstanding237,437,440
10 Day Avg. Volume2,840,986
30 Day Avg. Volume1,887,600
Financial Highlights & Ratios
PEG Ratio0.09
Price to Book (P/B)0.86
Price to Sales (P/S)0.00
P/FCF Ratio6.15
Enterprise Value/Market Cap0.64
Enterprise Value/Revenue0.90
Enterprise Value/Gross Profit3.86
Enterprise Value/Ebitda1.11
Forecast
1Y Price Target
$27.50Price Target Upside-1.47% Downside
Rating ConsensusHold
Number of Analyst Covering4
MGIC Investment Business Overview & Revenue Model
Company DescriptionMGIC Investment Corporation (MTG) is a leading provider of private mortgage insurance in the United States. The company operates primarily through its principal subsidiary, Mortgage Guaranty Insurance Corporation, offering mortgage insurance solutions that help consumers purchase homes with lower down payments. MGIC Investment plays a crucial role in the housing finance system, providing risk management and capital flexibility for lenders across the country.
How the Company Makes MoneyMGIC Investment Corporation makes money primarily through the premiums it charges for its mortgage insurance products. These premiums are paid by lenders or borrowers to insure the portion of the mortgage loan that exceeds a certain loan-to-value ratio, typically 80%. This insurance protects lenders against losses if a borrower defaults on their mortgage payments. The company's revenue model is heavily reliant on the volume of new policies written and the persistency of existing policies. MGIC also invests its capital reserves in various securities, generating additional income through investment returns. Key factors contributing to MGIC's earnings include housing market conditions, interest rate fluctuations, and regulatory changes affecting the mortgage industry.
MGIC Investment Earnings Call Summary
Earnings Call Date:Apr 30, 2025
(Q1-2025)
| % Change Since: 12.59%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Neutral
MGIC's first quarter results were marked by strong financial performance and significant capital returns to shareholders, but growth in insurance in force remains constrained by market conditions. Economic uncertainties and housing affordability challenges were noted, but the company's financial health and strategic initiatives reflect resilience.Q1-2025 Updates
Positive Updates
Strong Financial Performance
MGIC reported a net income of $186 million for the first quarter, with an annualized return on equity of 14.3%.
Capital Return to Shareholders
MGIC returned $224 million to shareholders through share repurchases in the first quarter and paid a quarterly common stock dividend of $33 million.
Favorable Loss Reserve Development
The reestimation of ultimate losses on prior delinquencies resulted in $50 million of favorable loss reserve development in the quarter.
Stable Insurance in Force
Insurance in force ended the quarter at $294 billion with an annual persistency rate of 85%.
Strong Liquidity Position
The holding company ended the quarter with $824 million in liquidity.
New Share Repurchase Program
The Board approved an additional $750 million share repurchase program and a $0.13 per share common stock dividend payable on May 21.
Negative Updates
Constrained Growth in Insurance in Force
Market conditions have constrained growth in insurance in force over the last few years, which is expected to persist this year.
Economic and Geopolitical Uncertainties
There are uncertainties around the current economic and geopolitical conditions, impacting future expectations.
Challenges in Housing Affordability
Housing affordability continues to pose challenges for homebuyers, although private mortgage insurance helps mitigate this.
Slight Increase in Delinquency Rate
The delinquency rate was 2.3%, which is 15 basis points higher than a year ago.
Company Guidance
During the first quarter of 2025, MGIC Investment Corporation provided substantial guidance on their financial performance and capital management strategies. They reported a net income of $186 million, reflecting a robust annualized return on equity of 14.3%. MGIC wrote $10 billion of new insurance, maintaining an insurance in force of $294 billion with an annual persistency rate of 85%. Throughout the quarter, the company repurchased 9.2 million shares totaling $224 million and distributed $33 million in common stock dividends, resulting in a combined payout of 107% of the net income over the prior four quarters. The holding company ended the quarter with $824 million in liquidity. Furthermore, MGIC announced an additional $750 million share repurchase program and a quarterly dividend of $0.13 per share. The company emphasized its disciplined approach to capital management, focusing on maintaining financial strength and flexibility, while acknowledging the potential impact of macroeconomic conditions. Overall, MGIC remains confident in its market leadership and its ability to sustain solid performance amid evolving economic landscapes.MGIC Investment Financial Statement Overview
Summary
MGIC Investment shows strong financial health with robust revenue growth, high profitability margins, and no debt, which enhances financial security. The cash flow metrics indicate strong cash generation capabilities. However, the absence of EBIT and EBITDA metrics limits the assessment of operating 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 | 1.12B | 1.21B | 929.10M | 936.09M | 987.23M | 1.02B |
| EBITDA | 734.81M | 1.00B | 974.36M | 1.19B | 939.15M | 676.67M |
| Net Income | 774.36M | 762.99M | 712.95M | 865.35M | 634.98M | 446.09M |
Balance Sheet | ||||||
| Total Assets | 6.54B | 6.55B | 6.54B | 6.21B | 7.33B | 7.35B |
| Cash, Cash Equivalents and Short-Term Investments | 6.09B | 149.94M | 363.67M | 327.38M | 284.69M | 287.95M |
| Total Debt | 0.00 | 644.67M | 643.20M | 662.81M | 1.15B | 1.24B |
| Total Liabilities | 1.40B | 1.36B | 1.47B | 1.57B | 1.15B | 1.24B |
| Stockholders Equity | 5.14B | 5.17B | 5.07B | 4.64B | 4.86B | 4.70B |
Cash Flow | ||||||
| Free Cash Flow | 756.85M | 723.86M | 710.96M | 646.76M | 692.20M | 729.00M |
| Operating Cash Flow | 758.15M | 725.03M | 712.96M | 650.01M | 696.32M | 732.31M |
| Investing Cash Flow | -135.60M | -142.00M | -179.19M | 410.49M | -160.75M | -772.51M |
| Financing Cash Flow | -849.42M | -719.04M | -496.04M | -1.03B | -527.29M | 167.82M |
MGIC Investment Technical Analysis
Positive
27.91
Price Trends
26.22
Positive
25.05
Positive
24.83
Positive
Market Momentum
0.51
Negative
66.96
Neutral
81.18
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 27.91 is above the 20-day moving average (MA) of 26.97, above the 50-day MA of 26.22, and above the 200-day MA of 24.83, indicating a bullish trend. The MACD of 0.51 indicates Negative momentum. The RSI at 66.96 is Neutral, neither overbought nor oversold. The STOCH value of 81.18 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 14 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 (67)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
84 Outperform | $5.65B | 8.47 | 14.09% | 2.26% | 4.33% | 10.21% | |
79 Outperform | $6.70B | 9.38 | 15.12% | 1.87% | 4.64% | 15.36% | |
79 Outperform | $6.23B | 9.00 | 13.29% | 2.04% | 9.87% | 3.41% | |
79 Outperform | $3.35B | 9.26 | 17.38% | ― | 11.61% | 14.35% | |
78 Outperform | $4.91B | 9.30 | 13.22% | 2.79% | 2.95% | 4.08% | |
69 Neutral | $6.44B | 41.28 | 3.23% | 3.45% | 0.96% | -27.04% | |
67 Neutral | $16.86B | 11.64 | 9.71% | 3.83% | 11.61% | -9.60% |
* Financial Sector Average
Performance Comparison
MTG
MGIC Investment
27.91
6.71
31.65%
FAF
First American Financial
62.72
11.14
21.60%
RDN
Radian Group
36.32
5.94
19.55%
ESNT
Essent Group
61.12
6.32
11.53%
NMIH
NMI Holdings
42.53
8.30
24.25%
ACT
Enact Holdings
37.54
7.36
24.39%
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.