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Here's Why You Should Add MGIC Investment (MTG) to Your Kitty
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MGIC Investment Corporation (MTG - Free Report) has been gaining momentum on the back of higher insurance in force, favorable loss reserve development, new business rewriting and prudent capital deployment.
Northbound Estimate Revision
Estimates for 2022 and 2023 have moved up nearly 12.1% and 0.4%, respectively, in the past 60 days, reflecting investors’ optimism.
Earnings Surprise History
MGIC Investment has a decent surprise history, beating earnings estimates in five of the last seven quarters and meeting the same twice.
Return on Equity
MTG’s return on equity for the trailing 12 months is 19.7%, better than the industry average of 8.4%. Return on equity expanded 710 basis points year over year. This reflects efficiency in utilizing shareholders’ funds.
Zacks Rank & Price Performance
MGIC Investment currently carries a Zacks Rank #2 (Buy). In the past six months, the stock has gained 2.7% compared with the industry’s increase of 8.1%.
Image Source: Zacks Investment Research
Business Tailwinds
The Zacks Consensus Estimate for 2022 earnings per share is pegged at $2.86, indicating a year-over-year increase of 49.7%.
New business writings combined with a higher annual persistency are likely to boost insurance in force.
Higher insurance in force, lower ceded premiums written, net of profit commission and higher premium yield are expected to benefit the net premium written of MGIC Investment.
The operating results of MTG should reflect the impacts of gains from the solid credit quality of higher insurance in force, strong housing market and decreasing delinquency rate.
New insurance written should gain from an increase in the mortgage origination market.
Considering higher consolidated investment portfolio and investment yields, net investment income is likely to improve.
The loss ratio is likely to improve, riding on fewer delinquency notices, reflecting the high quality of insurance in force and favorable loss reserve development that indicates better-than-expected cure rates.
MGIC Investment has constructed a solid capital base to increase the long-term value to shareholders while maintaining financial strength and flexibility.
The multi-line insurer expects to retain higher levels of liquidity at the holding company. MGIC Investment has constructed a solid capital base to increase the long-term value to shareholders while maintaining financial strength and flexibility.
As of Sep 30, 2022, MTG had $194 million remaining under the share repurchase program approved by the board of directors in 2021, which will expire at year-end 2023. In October 2022, the insurer repurchased additional shares for $32.2 million under the remaining authorization.
The Zacks Consensus Estimate for James River’s 2022 earnings has moved 0.6% north in the past 60 days. In the past year, JRVR has lost 24.6%.
The Zacks Consensus Estimate for JRVR’s 2022 and 2023 earnings implies a respective year-over-year rise of 134.2% and 13.9%.
Radian Group’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 45.10%.
The Zacks Consensus Estimate for RDN’s 2022 earnings has moved 12.7% north in the past 60 days. In the past year, the insurer has lost 8.2%.
Allianz’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 12.96%. In the past year, the insurer has lost 8.8%.
The Zacks Consensus Estimate for ALIZY’s 2022 and 2023 earnings has moved 0.6% and 0.8% north, respectively, in the past 30 days.
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Here's Why You Should Add MGIC Investment (MTG) to Your Kitty
MGIC Investment Corporation (MTG - Free Report) has been gaining momentum on the back of higher insurance in force, favorable loss reserve development, new business rewriting and prudent capital deployment.
Northbound Estimate Revision
Estimates for 2022 and 2023 have moved up nearly 12.1% and 0.4%, respectively, in the past 60 days, reflecting investors’ optimism.
Earnings Surprise History
MGIC Investment has a decent surprise history, beating earnings estimates in five of the last seven quarters and meeting the same twice.
Return on Equity
MTG’s return on equity for the trailing 12 months is 19.7%, better than the industry average of 8.4%. Return on equity expanded 710 basis points year over year. This reflects efficiency in utilizing shareholders’ funds.
Zacks Rank & Price Performance
MGIC Investment currently carries a Zacks Rank #2 (Buy). In the past six months, the stock has gained 2.7% compared with the industry’s increase of 8.1%.
Image Source: Zacks Investment Research
Business Tailwinds
The Zacks Consensus Estimate for 2022 earnings per share is pegged at $2.86, indicating a year-over-year increase of 49.7%.
New business writings combined with a higher annual persistency are likely to boost insurance in force.
Higher insurance in force, lower ceded premiums written, net of profit commission and higher premium yield are expected to benefit the net premium written of MGIC Investment.
The operating results of MTG should reflect the impacts of gains from the solid credit quality of higher insurance in force, strong housing market and decreasing delinquency rate.
New insurance written should gain from an increase in the mortgage origination market.
Considering higher consolidated investment portfolio and investment yields, net investment income is likely to improve.
The loss ratio is likely to improve, riding on fewer delinquency notices, reflecting the high quality of insurance in force and favorable loss reserve development that indicates better-than-expected cure rates.
MGIC Investment has constructed a solid capital base to increase the long-term value to shareholders while maintaining financial strength and flexibility.
The multi-line insurer expects to retain higher levels of liquidity at the holding company. MGIC Investment has constructed a solid capital base to increase the long-term value to shareholders while maintaining financial strength and flexibility.
As of Sep 30, 2022, MTG had $194 million remaining under the share repurchase program approved by the board of directors in 2021, which will expire at year-end 2023. In October 2022, the insurer repurchased additional shares for $32.2 million under the remaining authorization.
Other Stocks to Consider
Some top-ranked stocks from the insurance industry include James River Group Holdings, Ltd. (JRVR - Free Report) , Radian Group Inc. (RDN - Free Report) and Allianz SE (ALIZY - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for James River’s 2022 earnings has moved 0.6% north in the past 60 days. In the past year, JRVR has lost 24.6%.
The Zacks Consensus Estimate for JRVR’s 2022 and 2023 earnings implies a respective year-over-year rise of 134.2% and 13.9%.
Radian Group’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 45.10%.
The Zacks Consensus Estimate for RDN’s 2022 earnings has moved 12.7% north in the past 60 days. In the past year, the insurer has lost 8.2%.
Allianz’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 12.96%. In the past year, the insurer has lost 8.8%.
The Zacks Consensus Estimate for ALIZY’s 2022 and 2023 earnings has moved 0.6% and 0.8% north, respectively, in the past 30 days.