We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Here's What Makes MGIC Investment (MTG) an Attractive Pick
Read MoreHide Full Article
MGIC Investment Corporation (MTG - Free Report) has been gaining momentum on higher insurance in force, higher direct premium yield, increasing annual persistency and a strong capital position.
Northbound Estimate Revision
Estimates for 2022 and 2023 have moved up nearly 11.6% and 1.3%, 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 17%, better than the industry average of 7.7%. It expanded 430 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). Year to date, the stock has gained 0.3% against the industry’s decline of 4.3%.
Image Source: Zacks Investment Research
Business Tailwinds
Higher insurance in force, an increase in direct premium yield, net of profit commission and lower ceded premiums written are likely to drive the net premiums written by the multiline insurer.
New business rewriting, combined with increasing annual persistency, will likely boost the insurance in force portfolio.
New insurance written should gain from an increase in the mortgage origination market.
MGIC Investment benefits from the solid credit quality of the growing insurance in force, a strong housing market, decreasing delinquency rate and favorable economic conditions.
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 indicate better-than-expected cure rates.
MTG boasts a solid balance sheet. Debt to capital has lowered over the last four years. The insurer’s balanced approach to maintaining a strong capital position provides sufficient flexibility to maximize its long-term value. A lower level of losses paid and higher net premium written are likely to benefit the cash flow from operations.
As of Jun 30, 2022, MGIC Investment had $278 million remaining under the share repurchase program approved by its board in 2021 that expires at year-end 2023. In July 2022, MTG repurchased additional shares for $27.9 million under the remaining authorization.
Other Stocks to Consider
Some other top-ranked stocks from the multi-line insurance industry are Radian Group Inc. (RDN - Free Report) , James River Group Holdings, Ltd. (JRVR - Free Report) and Old Republic International Corporation (ORI - Free Report) . Radian Group currently sports a Zacks Rank #1 (Strong Buy), while James River Group and Old Republic International presently carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Radian Group’s earnings surpassed estimates in three of the last four quarters and missed in one, the average earnings surprise being 29.51%.
The Zacks Consensus Estimate for RDN’s 2022 and 2023 earnings has moved 16.1% and 9.7% north, respectively, in the past 60 days. Year to date, the insurer has gained 0.1%.
The Zacks Consensus Estimate for James River Group’s 2022 and 2023 earnings implies 137% and 15.3% year-over-year growth, respectively.
The Zacks Consensus Estimate for JRVR’s 2022 and 2023 earnings has moved 2.6% and 4.6% north, respectively, in the past 60 days. Year to date, the insurer has declined 16.1%.
Old Republic International’s earnings surpassed estimates in three of the last four quarters and missed in one, the average earnings surprise being 15.1%.
The Zacks Consensus Estimate for ORI’s 2022 earnings has moved 4.2% north in the past 60 days. Year to date, the insurer has declined 8.7%.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Here's What Makes MGIC Investment (MTG) an Attractive Pick
MGIC Investment Corporation (MTG - Free Report) has been gaining momentum on higher insurance in force, higher direct premium yield, increasing annual persistency and a strong capital position.
Northbound Estimate Revision
Estimates for 2022 and 2023 have moved up nearly 11.6% and 1.3%, 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 17%, better than the industry average of 7.7%. It expanded 430 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). Year to date, the stock has gained 0.3% against the industry’s decline of 4.3%.
Image Source: Zacks Investment Research
Business Tailwinds
Higher insurance in force, an increase in direct premium yield, net of profit commission and lower ceded premiums written are likely to drive the net premiums written by the multiline insurer.
New business rewriting, combined with increasing annual persistency, will likely boost the insurance in force portfolio.
New insurance written should gain from an increase in the mortgage origination market.
MGIC Investment benefits from the solid credit quality of the growing insurance in force, a strong housing market, decreasing delinquency rate and favorable economic conditions.
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 indicate better-than-expected cure rates.
MTG boasts a solid balance sheet. Debt to capital has lowered over the last four years. The insurer’s balanced approach to maintaining a strong capital position provides sufficient flexibility to maximize its long-term value. A lower level of losses paid and higher net premium written are likely to benefit the cash flow from operations.
As of Jun 30, 2022, MGIC Investment had $278 million remaining under the share repurchase program approved by its board in 2021 that expires at year-end 2023. In July 2022, MTG repurchased additional shares for $27.9 million under the remaining authorization.
Other Stocks to Consider
Some other top-ranked stocks from the multi-line insurance industry are Radian Group Inc. (RDN - Free Report) , James River Group Holdings, Ltd. (JRVR - Free Report) and Old Republic International Corporation (ORI - Free Report) . Radian Group currently sports a Zacks Rank #1 (Strong Buy), while James River Group and Old Republic International presently carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Radian Group’s earnings surpassed estimates in three of the last four quarters and missed in one, the average earnings surprise being 29.51%.
The Zacks Consensus Estimate for RDN’s 2022 and 2023 earnings has moved 16.1% and 9.7% north, respectively, in the past 60 days. Year to date, the insurer has gained 0.1%.
The Zacks Consensus Estimate for James River Group’s 2022 and 2023 earnings implies 137% and 15.3% year-over-year growth, respectively.
The Zacks Consensus Estimate for JRVR’s 2022 and 2023 earnings has moved 2.6% and 4.6% north, respectively, in the past 60 days. Year to date, the insurer has declined 16.1%.
Old Republic International’s earnings surpassed estimates in three of the last four quarters and missed in one, the average earnings surprise being 15.1%.
The Zacks Consensus Estimate for ORI’s 2022 earnings has moved 4.2% north in the past 60 days. Year to date, the insurer has declined 8.7%.