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Here's Why Hold is an Apt Strategy for NMI Holdings (NMIH) Now
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NMI Holdings Inc.’s (NMIH - Free Report) growing U.S. mortgage insurance market, higher single premium policy cancellations and flexible liquidity make it worth retaining in one’s portfolio.
Growth Projections
The Zacks Consensus Estimate for NMI Holdings’ 2022 earnings is pegged at $3.38, indicating a 23.8% increase from the year-ago reported figure on 8.9% higher revenues of $528.5 million.
The consensus estimate for 2023 earnings stands at $3.71, indicating a 9.6% increase from the year-ago reported figure on 13.7% higher revenues of $600.9 million.
Earnings Surprise History
NMI Holdings has a decent earnings surprise history. It beat estimates in each of the last four quarters with the average being 6.38%.
Return on Equity (ROE)
NMI Holdings’ ROE for the trailing 12 months is 18.3%, better than the industry average of 6.7%. The metric expanded 260 basis points year over year. This reflects its efficiency in utilizing shareholders’ funds.
Style Score
NMI Holdings has a favorable VGM Score of A. VGM Score helps identify stocks with the most attractive value, best growth and the most promising momentum.
Business Tailwinds
National MI continued to deliver significant new business production, robust growth in high-quality and short portfolios as well as continued success in the capital and reinsurance markets.
By virtue of the broad resiliency of the housing market, growth in total mortgage origination volume and increasing size of the U.S. mortgage insurance market, new insurance written (NIW), the primary driver of insurance-in-force (IIF) of National MI is expected to improve. Also, the continued expansion of customer franchise and growth in monthly and single premium policy production tied to the growth in customer franchise and market presence are expected to drive NIW of NMIH.
NMI Holdings expects persistency to continue to improve and drive further increases in the embedded portfolio value for the remainder of the year.
NMI Holdings remains well poised to gain from the growth of IIF, increased monthly policy production and higher single premium policy cancellations, which continue to contribute to net premiums earned, one of the key drivers of revenue growth.
Net investment income is expected to improve with growth in the size of the total investment portfolio and an increase in book yield.
NMIH boasts a solid balance sheet with a robust funding position and a sizable regulatory capital buffer.
National MI remains well-poised to continue delivering strong mid-teens returns and compounded book value-per-share growth for shareholders. NMI Holdings had $73.8 million of repurchase capacity remaining under the program declared in February.
Zacks Rank
NMI Holdings currently carries a Zacks Rank #3 (Hold). In the past year, the stock has lost 5.8% against the industry’s increase of 3.7%.
Root delivered a trailing four-quarter average earnings surprise of 22.44%. In the past year, ROOT has lost 92.5%.
The Zacks Consensus Estimate for ROOT’s 2022 and 2023 earnings indicates a respective year-over-year increase of 44.7% and 23.9%.
Kinsale Capital’s earnings surpassed estimates in each of the last four quarters, the average being 15.16%. In the past year, Kinsale Capital has gained 10.8%.
The Zacks Consensus Estimate for KNSL’s 2022 and 2023 earnings implies a respective year-over-year rise of 27.5% and 22.4%.
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 11%.
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Here's Why Hold is an Apt Strategy for NMI Holdings (NMIH) Now
NMI Holdings Inc.’s (NMIH - Free Report) growing U.S. mortgage insurance market, higher single premium policy cancellations and flexible liquidity make it worth retaining in one’s portfolio.
Growth Projections
The Zacks Consensus Estimate for NMI Holdings’ 2022 earnings is pegged at $3.38, indicating a 23.8% increase from the year-ago reported figure on 8.9% higher revenues of $528.5 million.
The consensus estimate for 2023 earnings stands at $3.71, indicating a 9.6% increase from the year-ago reported figure on 13.7% higher revenues of $600.9 million.
Earnings Surprise History
NMI Holdings has a decent earnings surprise history. It beat estimates in each of the last four quarters with the average being 6.38%.
Return on Equity (ROE)
NMI Holdings’ ROE for the trailing 12 months is 18.3%, better than the industry average of 6.7%. The metric expanded 260 basis points year over year. This reflects its efficiency in utilizing shareholders’ funds.
Style Score
NMI Holdings has a favorable VGM Score of A. VGM Score helps identify stocks with the most attractive value, best growth and the most promising momentum.
Business Tailwinds
National MI continued to deliver significant new business production, robust growth in high-quality and short portfolios as well as continued success in the capital and reinsurance markets.
By virtue of the broad resiliency of the housing market, growth in total mortgage origination volume and increasing size of the U.S. mortgage insurance market, new insurance written (NIW), the primary driver of insurance-in-force (IIF) of National MI is expected to improve. Also, the continued expansion of customer franchise and growth in monthly and single premium policy production tied to the growth in customer franchise and market presence are expected to drive NIW of NMIH.
NMI Holdings expects persistency to continue to improve and drive further increases in the embedded portfolio value for the remainder of the year.
NMI Holdings remains well poised to gain from the growth of IIF, increased monthly policy production and higher single premium policy cancellations, which continue to contribute to net premiums earned, one of the key drivers of revenue growth.
Net investment income is expected to improve with growth in the size of the total investment portfolio and an increase in book yield.
NMIH boasts a solid balance sheet with a robust funding position and a sizable regulatory capital buffer.
National MI remains well-poised to continue delivering strong mid-teens returns and compounded book value-per-share growth for shareholders. NMI Holdings had $73.8 million of repurchase capacity remaining under the program declared in February.
Zacks Rank
NMI Holdings currently carries a Zacks Rank #3 (Hold). In the past year, the stock has lost 5.8% against the industry’s increase of 3.7%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the insurance industry are Root, Inc. (ROOT - Free Report) , Kinsale Capital Group, Inc. (KNSL - Free Report) and Radian Group Inc. (RDN - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Root delivered a trailing four-quarter average earnings surprise of 22.44%. In the past year, ROOT has lost 92.5%.
The Zacks Consensus Estimate for ROOT’s 2022 and 2023 earnings indicates a respective year-over-year increase of 44.7% and 23.9%.
Kinsale Capital’s earnings surpassed estimates in each of the last four quarters, the average being 15.16%. In the past year, Kinsale Capital has gained 10.8%.
The Zacks Consensus Estimate for KNSL’s 2022 and 2023 earnings implies a respective year-over-year rise of 27.5% and 22.4%.
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 11%.