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MGIC Investment (MTG) Q2 Earnings Beat on Lower Loss & Tax
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MGIC Investment Corporation (MTG - Free Report) reported second-quarter 2018 operating net income per share of 49 cents, surpassing the Zacks Consensus Estimate by 36.1%. The bottom line also soared 58.1% year over year on higher revenues, lower loss and reduction in tax.
MGIC Investment Corporation Price, Consensus and EPS Surprise
Insurance in force as well as investment income rose while claims and primary delinquent inventory declined year over year. Also, persistency increased and a lower tax rate added to the upside.
Operational Update
MGIC Investment recorded total operating revenues of $284 million, increasing nearly 8% year over year on higher net investment income (up 16.1%) and higher premiums (up nearly 6.9%). Moreover, the top line beat the Zacks Consensus Estimate by 6.1%.
Increase in net premiums earned was driven by higher insurance in force offset by a lower effective premium yield.
New insurance written was $13.2 billion, up 2.4% year over year.
As of Jun 30, 2018, the company’s primary insurance in force was $200.7 billion, up 7.2% year over year.
Persistency or the percentage of insurance remaining in force from the preceding year was 80.1% as of Jun 30, 2018, expanding 230 basis points year over year.
Primary delinquent inventory declined 12.8% year over year to 36,037 loans on Jun 30, 2018.
Net underwriting and other expenses totaled $44.7 million, up 8.7% year over year. Total loss and expenses declined 46.2% year over year to $44.5 million, primarily due to reduced losses.
Loss ratio was (5.4%) in the quarter under review compared with 11.8% a year ago. Underwriting expense ratio of 16.4% deteriorated 80 basis points year over year. MGIC Investment expects new business worth $50 billion in 2018, banking on a strong purchase mortgage market and a potential share gain from the Federal Housing Administration.
Financial Update
Book value per share, a measure of net worth, grew nearly 5.2% year over year to $9.15 as of Jun 30, 2018.
As of Jun 30, 2018, MGIC Investment had $191 million in cash and investments, up 28.2% year over year.
Risk-to-capital ratio was 10.0:1 as of Jun 30, 2018 compared with 11.3:1 as of Jun 30, 2017.
Debt to total capital ratio was 20% at the quarter-end.
The company had spent about $100.1 million to buy back 9.2 million shares in the reported quarter.
The bottom line of Fidelity National Financial, Inc. (FNF - Free Report) , The Progressive Corporation (PGR - Free Report) and RLI Corp. (RLI - Free Report) outpaced the respective Zacks Consensus Estimate in the second quarter of 2018.
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It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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MGIC Investment (MTG) Q2 Earnings Beat on Lower Loss & Tax
MGIC Investment Corporation (MTG - Free Report) reported second-quarter 2018 operating net income per share of 49 cents, surpassing the Zacks Consensus Estimate by 36.1%. The bottom line also soared 58.1% year over year on higher revenues, lower loss and reduction in tax.
MGIC Investment Corporation Price, Consensus and EPS Surprise
MGIC Investment Corporation Price, Consensus and EPS Surprise | MGIC Investment Corporation Quote
Insurance in force as well as investment income rose while claims and primary delinquent inventory declined year over year. Also, persistency increased and a lower tax rate added to the upside.
Operational Update
MGIC Investment recorded total operating revenues of $284 million, increasing nearly 8% year over year on higher net investment income (up 16.1%) and higher premiums (up nearly 6.9%). Moreover, the top line beat the Zacks Consensus Estimate by 6.1%.
Increase in net premiums earned was driven by higher insurance in force offset by a lower effective premium yield.
New insurance written was $13.2 billion, up 2.4% year over year.
As of Jun 30, 2018, the company’s primary insurance in force was $200.7 billion, up 7.2% year over year.
Persistency or the percentage of insurance remaining in force from the preceding year was 80.1% as of Jun 30, 2018, expanding 230 basis points year over year.
Primary delinquent inventory declined 12.8% year over year to 36,037 loans on Jun 30, 2018.
Net underwriting and other expenses totaled $44.7 million, up 8.7% year over year. Total loss and expenses declined 46.2% year over year to $44.5 million, primarily due to reduced losses.
Loss ratio was (5.4%) in the quarter under review compared with 11.8% a year ago. Underwriting expense ratio of 16.4% deteriorated 80 basis points year over year. MGIC Investment expects new business worth $50 billion in 2018, banking on a strong purchase mortgage market and a potential share gain from the Federal Housing Administration.
Financial Update
Book value per share, a measure of net worth, grew nearly 5.2% year over year to $9.15 as of Jun 30, 2018.
As of Jun 30, 2018, MGIC Investment had $191 million in cash and investments, up 28.2% year over year.
Risk-to-capital ratio was 10.0:1 as of Jun 30, 2018 compared with 11.3:1 as of Jun 30, 2017.
Debt to total capital ratio was 20% at the quarter-end.
The company had spent about $100.1 million to buy back 9.2 million shares in the reported quarter.
Zacks Rank and Performance of Other Insurers
MGIC Investment has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The bottom line of Fidelity National Financial, Inc. (FNF - Free Report) , The Progressive Corporation (PGR - Free Report) and RLI Corp. (RLI - Free Report) outpaced the respective Zacks Consensus Estimate in the second quarter of 2018.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>