MGIC Investment Corporation’s (MTG - Free Report) solid insurance in force, a decline in loss and claims payments, lower delinquency, better housing market fundamentals and a solid capital position make it worth retaining in one’s portfolio.
MTG has a decent track record of beating earnings estimates in the last five quarters. Earnings of this largest private mortgage insurer in the United States have risen 16% over the last five years, better than the industry average of 6.2%.
Return on Equity
MTG’s trailing 12-month ROE was 19.7%, which expanded 610 basis points year over year and came ahead of the industry average of 8.4%. Return on equity, a profitability measure, reflects how effectively a company is utilizing its shareholders.
Zacks Rank & Price Performance
MTG currently carries a Zacks Rank #3 (Hold). Year to date, the stock has gained 1.5% against the industry’s decline of 15.4%.
Growth Drivers
MGIC Investment has been witnessing an increase in new business written, banking on solid persistency, favorable credit trends and refinances. The insurer expects new business, combined with increasing annual persistency, to result in the continued growth of the insurance-in-force portfolio.
As MTG has been witnessing a declining pattern of claim filings, we expect paid claims to decrease further. A decline in loss and claims should continue to strengthen the balance sheet and hence improve its financial profile.
MTG has been improving its capital position, on the strength of capital contribution, reinsurance transaction and cash position. Both leverage and times interest earned ratio have improved.
Riding on a solid capital position, MTG returned about $500 million of capital to shareholders through a combination of shares repurchases and dividends. In January 2023, MTG repurchased additional shares for $28 million.
Also, MTG expects operating expenses will be down modestly in 2023, in the range of $235-$245 million, aiding margins.
Stocks to Consider
Some better-ranked stocks from the insurance industry are Primerica (PRI - Free Report) , Voya Financial (VOYA - Free Report) , and Brighthouse Financial (BHF - Free Report) .
Primerica’s earnings surpassed the Zacks Consensus Estimate in two of the last four quarters. PRI sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for PRI’s 2023 and 2024 earnings per share indicates year-over-year increases of 18.3% and 8.9%, respectively. Year to date, PRI shares gained 18.5%.
Voya Financial’s earnings surpassed the Zacks Consensus Estimate in all the last four quarters, the average earnings surprise being 38.68%. VOYA carries Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for VOYA’s 2023 and 2024 earnings per share indicates year-over-year increases of 6.1% and 14%, respectively. Year to date, VOYA shares gained 16.3%.
Brighthouse Financial’s earnings surpassed the Zacks Consensus Estimate in three of the last four quarters, the average beat being 2.07%. BHF carries Zacks Rank #2.
The Zacks Consensus Estimate for BHF’s 2023 and 2024 earnings per share indicates year-over-year increases of 29.4% and 12.6%, respectively. Year to date, BHF shares lost 17.3%.
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MGIC Investment Corporation’s (MTG - Free Report) solid insurance in force, a decline in loss and claims payments, lower delinquency, better housing market fundamentals and a solid capital position make it worth retaining in one’s portfolio.
MTG has a decent track record of beating earnings estimates in the last five quarters. Earnings of this largest private mortgage insurer in the United States have risen 16% over the last five years, better than the industry average of 6.2%.
Return on Equity
MTG’s trailing 12-month ROE was 19.7%, which expanded 610 basis points year over year and came ahead of the industry average of 8.4%. Return on equity, a profitability measure, reflects how effectively a company is utilizing its shareholders.
Zacks Rank & Price Performance
MTG currently carries a Zacks Rank #3 (Hold). Year to date, the stock has gained 1.5% against the industry’s decline of 15.4%.
Growth Drivers
MGIC Investment has been witnessing an increase in new business written, banking on solid persistency, favorable credit trends and refinances. The insurer expects new business, combined with increasing annual persistency, to result in the continued growth of the insurance-in-force portfolio.
As MTG has been witnessing a declining pattern of claim filings, we expect paid claims to decrease further. A decline in loss and claims should continue to strengthen the balance sheet and hence improve its financial profile.
MTG has been improving its capital position, on the strength of capital contribution, reinsurance transaction and cash position. Both leverage and times interest earned ratio have improved.
Riding on a solid capital position, MTG returned about $500 million of capital to shareholders through a combination of shares repurchases and dividends. In January 2023, MTG repurchased additional shares for $28 million.
Also, MTG expects operating expenses will be down modestly in 2023, in the range of $235-$245 million, aiding margins.
Stocks to Consider
Some better-ranked stocks from the insurance industry are Primerica (PRI - Free Report) , Voya Financial (VOYA - Free Report) , and Brighthouse Financial (BHF - Free Report) .
Primerica’s earnings surpassed the Zacks Consensus Estimate in two of the last four quarters. PRI sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for PRI’s 2023 and 2024 earnings per share indicates year-over-year increases of 18.3% and 8.9%, respectively. Year to date, PRI shares gained 18.5%.
Voya Financial’s earnings surpassed the Zacks Consensus Estimate in all the last four quarters, the average earnings surprise being 38.68%. VOYA carries Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for VOYA’s 2023 and 2024 earnings per share indicates year-over-year increases of 6.1% and 14%, respectively. Year to date, VOYA shares gained 16.3%.
Brighthouse Financial’s earnings surpassed the Zacks Consensus Estimate in three of the last four quarters, the average beat being 2.07%. BHF carries Zacks Rank #2.
The Zacks Consensus Estimate for BHF’s 2023 and 2024 earnings per share indicates year-over-year increases of 29.4% and 12.6%, respectively. Year to date, BHF shares lost 17.3%.
Free Report Reveals How You Could Profit from the Growing Electric Vehicle Industry
Globally, electric car sales continue their remarkable growth even after breaking records in 2021. High gas prices have fueled his demand, but so has evolving EV comfort, features and technology. So, the fervor for EVs will be around long after gas prices normalize. Not only are manufacturers seeing record-high profits, but producers of EV-related technology are raking in the dough as well. Do you know how to cash in? If not, we have the perfect report for you – and it’s FREE! Today, don't miss your chance to download Zacks' top 5 stocks for the electric vehicle revolution at no cost and with no obligation.
>>Send me my free report on the top 5 EV stocks<<
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