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MGIC Investment Corp (MTG)
:MTG
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MGIC Investment
(NYSE:MTG)
Rating:75Outperform
Price Target:
$29.00
▲(4.09% Upside)
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
$6.42B
Dividend Yield1.94%
Average Volume (3M)2.39M
Price to Earnings (P/E)9.1
Beta (1Y)0.71
Revenue Growth3.26%
EPS Growth12.70%
CountryUS
Employees555
SectorFinancial
Sector Strength71
IndustryInsurance - Specialty
Share Statistics
EPS (TTM)0.82
Shares Outstanding230,523,010
10 Day Avg. Volume2,336,898
30 Day Avg. Volume2,393,530
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 Cap1.13
Enterprise Value/Revenue5.97
Enterprise Value/Gross Profit6.34
Enterprise Value/Ebitda9.42
Forecast
1Y Price Target
$27.83Price Target Upside-0.11% Downside
Rating ConsensusHold
Number of Analyst Covering6
MGIC Investment Business Overview & Revenue Model
Company DescriptionMGIC Investment Corporation (MTG) is a leading provider of private mortgage insurance in the United States. Founded in 1957, the company primarily operates in the financial services sector, specializing in offering mortgage insurance policies that protect lenders against borrower defaults. MGIC's core products include traditional mortgage insurance, as well as various risk management solutions designed to facilitate home ownership and stabilize the housing market. The company serves a diverse clientele, including mortgage lenders, banks, and other financial institutions.
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: 10.42%|
Next Earnings Date:Oct 29, 2025
Earnings Call Sentiment Positive
MGIC reported strong financial performance with robust returns to shareholders and stable premium yields. However, the company is facing challenges with limited growth in insurance in force and headwinds in the housing market. Despite these challenges, the company's capital management and favorable loss reserve development indicate resilience.Q2-2025 Updates
Positive Updates
Net Income and Return on Equity
MGIC recorded a net income of $193 million with an annualized return on equity of 15% for the second quarter.
New Insurance Written
MGIC wrote $16 billion of new insurance during the second quarter, with insurance in force ending at $297 billion.
Strong Shareholder Returns
Share repurchases totaled 7.1 million shares for $181 million, with shareholder dividends totaling $132 million over the last four quarters, representing a 112% payout on net income.
Quarterly Dividend Increase
MGIC's Board authorized a 15% increase to the quarterly common stock dividend to $0.15 per share, marking five consecutive years of dividend increases.
Favorable Loss Reserve Development
The reestimation of ultimate losses on prior delinquencies resulted in $54 million of favorable loss reserve development.
Stable Premium Yield and Investment Income
The in-force premium yield was stable at 38.3 basis points, while the book yield on the portfolio was 4% at the end of the second quarter.
Negative Updates
Limited Growth in Insurance In Force
Market conditions have limited growth of insurance in force, a trend expected to persist through the remainder of the year.
Challenges in the Housing Market
The housing market faces headwinds from elevated interest rates, affordability challenges, and a slowdown in home sales.
Slight Increase in Delinquency Notices
MGIC received 12,000 new delinquency notices in the second quarter, 5% higher than the same period last year.
Company Guidance
During the second quarter of 2025, MGIC Investment Corporation reported a net income of $193 million, achieving an annualized return on equity of 15%. The company wrote $16 billion of new insurance, with insurance in force ending the quarter at $297 billion and an annual persistency rate of 85%. MGIC executed share repurchases totaling 7.1 million shares for $181 million and distributed a quarterly common stock dividend of $0.13 per share, amounting to $31 million. Over the previous four quarters, the company repurchased shares worth $721 million and paid $132 million in dividends, representing a 112% payout on net income. In the third quarter, an additional 2.6 million shares were repurchased for $68 million. The in-force premium yield was 38.3 basis points, and the book yield on the investment portfolio was 4%. Operating expenses for the quarter were $52 million, inclusive of a $4 million accounting charge related to pension plan settlements. MGIC's capital management strategy emphasized maintaining a strong capital structure, with $6 billion of balance sheet capital and a reinsurance program reducing required assets by $2.5 billion. The company ended the quarter with $1 billion in liquidity at the holding company and declared a 15% increase in the quarterly dividend to $0.15 per share.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
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 | 1.15B | 1.21B | 929.10M | 936.09M | 987.23M | 1.02B |
| EBITDA | 771.80M | 1.00B | 974.36M | 1.19B | 939.15M | 676.67M |
| Net Income | 762.61M | 762.99M | 712.95M | 865.35M | 634.98M | 446.09M |
Balance Sheet | ||||||
| Total Assets | 6.49B | 6.55B | 6.54B | 6.21B | 7.33B | 7.35B |
| Cash, Cash Equivalents and Short-Term Investments | 298.89M | 6.08B | 363.67M | 327.38M | 284.69M | 287.95M |
| Total Debt | 645.40M | 644.67M | 643.20M | 662.81M | 1.15B | 1.24B |
| Total Liabilities | 1.33B | 1.36B | 1.47B | 1.57B | 1.15B | 1.24B |
| Stockholders Equity | 5.15B | 5.17B | 5.07B | 4.64B | 4.86B | 4.70B |
Cash Flow | ||||||
| Free Cash Flow | 770.86M | 723.86M | 710.96M | 646.76M | 692.20M | 729.00M |
| Operating Cash Flow | 771.90M | 725.03M | 712.96M | 650.01M | 696.32M | 732.31M |
| Investing Cash Flow | 119.19M | -142.00M | -179.19M | 410.49M | -160.75M | -772.51M |
| Financing Cash Flow | -880.01M | -719.04M | -496.04M | -1.03B | -527.29M | 167.82M |
MGIC Investment Technical Analysis
Positive
27.86
Price Trends
26.46
Positive
25.70
Positive
24.89
Positive
Market Momentum
0.41
Negative
67.87
Neutral
95.24
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 27.86 is above the 20-day moving average (MA) of 26.24, above the 50-day MA of 26.46, and above the 200-day MA of 24.89, indicating a bullish trend. The MACD of 0.41 indicates Negative momentum. The RSI at 67.87 is Neutral, neither overbought nor oversold. The STOCH value of 95.24 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 (71)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $3.08B | 8.49 | 16.91% | ― | 9.99% | 11.47% | |
79 Outperform | $6.19B | 9.16 | 12.94% | 1.88% | 4.79% | -0.76% | |
78 Outperform | $4.76B | 8.85 | 13.07% | 2.84% | 0.24% | 3.14% | |
78 Outperform | $5.64B | 8.69 | 13.47% | 2.00% | 3.15% | 5.70% | |
75 Outperform | $6.42B | 9.13 | 14.85% | 1.94% | 3.26% | 12.70% | |
71 Outperform | S$39.40B | 12.64 | 10.65% | 4.19% | 0.07% | 12.60% | |
60 Neutral | $6.70B | 36.37 | 3.80% | 3.28% | 14.28% | -2.87% |
* Financial Sector Average
Performance Comparison
MTG
MGIC Investment
27.86
4.37
18.60%
FAF
First American Financial
65.85
5.90
9.84%
RDN
Radian Group
35.15
1.33
3.93%
ESNT
Essent Group
62.82
3.10
5.19%
NMIH
NMI Holdings
39.75
1.49
3.89%
ACT
Enact Holdings
37.44
4.06
12.16%
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.