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MGIC Investment (MTG) Q1 Earnings In Line, Revenues Fall Y/Y
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MGIC Investment Corporation (MTG - Free Report) reported first-quarter 2021 operating net income per share of 42 cents, in line with the Zacks Consensus Estimate. The reported figure was flat year over year.
The company witnessed lower premiums earned and net investment income as well as higher expenses, offset by improved loss ratio.
MGIC Investment Corporation Price, Consensus and EPS Surprise
Insurance in force increased 11.6% from the prior-year quarter to $251.7 billion.
The company witnessed a 92.7% increase in primary delinquency to 52,775 loans, primarily due to the adverse economic impact of COVID-19.
MGIC Investment recorded total operating revenues of $296 million, which decreased 2.9% year over year on lower premiums earned and net investment income.
Net premiums earned decreased 2.3% year over year to $255 million due to an increase in ceded premiums written and lower average premium rates on insurance in force. This was partially offset by higher average insurance in force. Net premiums earned were impacted by an increase in accelerated premiums earned from single premium policy cancellations.
Net investment income decreased 8.3% year over year to $37.9 million due to lower investment yields, partially offset by an increase in the consolidated investment portfolio.
Persistency — the percentage of insurance remaining in force from one year prior — was 56.2% as of Mar 31, 2020, down 1680 basis points (bps) year over year.
New insurance written was $30.8 billion, up 72.1% year over year due to resilience of the purchase mortgage market, attractive refinance market and MGIC Investment’s positioning in the market.
Net underwriting and other expenses totaled $50.7 million, up 13.2% year over year.
For the quarter under review, loss ratio was 15.5%, which improved 790 bps year over year.
Financial Update
Book value per share, a measure of net worth, grew about 0.5% from 2020-end to $13.95 as of Mar 31, 2021.
MGIC Investment had $802 million in cash, cash equivalents and investments, up 42.4% year over year.
Total assets were $7.4 billion, up 0.7% from the 2020-end level.
Capital Deployment
MGIC Investment paid out dividends of $390 million to its holding company while MGIC Investment Corporation paid $0.06 in dividend per common share to shareholders during first-quarter 2021.
As of Mar 31, 2020, the company had shares worth $291 million remaining under the share buyback authorization.
First-quarter earnings of Assurant, Inc. (AIZ - Free Report) , Prudential Financial, Inc. (PRU - Free Report) and Everest Re Group, Ltd. beat the respective Zacks Consensus Estimate.
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MGIC Investment (MTG) Q1 Earnings In Line, Revenues Fall Y/Y
MGIC Investment Corporation (MTG - Free Report) reported first-quarter 2021 operating net income per share of 42 cents, in line with the Zacks Consensus Estimate. The reported figure was flat year over year.
The company witnessed lower premiums earned and net investment income as well as higher expenses, offset by improved loss ratio.
MGIC Investment Corporation Price, Consensus and EPS Surprise
MGIC Investment Corporation price-consensus-eps-surprise-chart | MGIC Investment Corporation Quote
Operational Update
Insurance in force increased 11.6% from the prior-year quarter to $251.7 billion.
The company witnessed a 92.7% increase in primary delinquency to 52,775 loans, primarily due to the adverse economic impact of COVID-19.
MGIC Investment recorded total operating revenues of $296 million, which decreased 2.9% year over year on lower premiums earned and net investment income.
Net premiums earned decreased 2.3% year over year to $255 million due to an increase in ceded premiums written and lower average premium rates on insurance in force. This was partially offset by higher average insurance in force. Net premiums earned were impacted by an increase in accelerated premiums earned from single premium policy cancellations.
Net investment income decreased 8.3% year over year to $37.9 million due to lower investment yields, partially offset by an increase in the consolidated investment portfolio.
Persistency — the percentage of insurance remaining in force from one year prior — was 56.2% as of Mar 31, 2020, down 1680 basis points (bps) year over year.
New insurance written was $30.8 billion, up 72.1% year over year due to resilience of the purchase mortgage market, attractive refinance market and MGIC Investment’s positioning in the market.
Net underwriting and other expenses totaled $50.7 million, up 13.2% year over year.
For the quarter under review, loss ratio was 15.5%, which improved 790 bps year over year.
Financial Update
Book value per share, a measure of net worth, grew about 0.5% from 2020-end to $13.95 as of Mar 31, 2021.
MGIC Investment had $802 million in cash, cash equivalents and investments, up 42.4% year over year.
Total assets were $7.4 billion, up 0.7% from the 2020-end level.
Capital Deployment
MGIC Investment paid out dividends of $390 million to its holding company while MGIC Investment Corporation paid $0.06 in dividend per common share to shareholders during first-quarter 2021.
As of Mar 31, 2020, the company had shares worth $291 million remaining under the share buyback authorization.
Zacks Rank
MGIC Investment currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Insurance Releases
First-quarter earnings of Assurant, Inc. (AIZ - Free Report) , Prudential Financial, Inc. (PRU - Free Report) and Everest Re Group, Ltd. beat the respective Zacks Consensus Estimate.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2021 today >>