Back to top

Is MGIC Investment (MTG) a Great Value Stock Right Now?

Read MoreHide Full Article

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One company to watch right now is MGIC Investment (MTG - Free Report) . MTG is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 7.81, while its industry has an average P/E of 9.50. Over the past 52 weeks, MTG's Forward P/E has been as high as 12.79 and as low as 7.09, with a median of 8.46.

We should also highlight that MTG has a P/B ratio of 1.34. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. MTG's current P/B looks attractive when compared to its industry's average P/B of 1.40. Over the past year, MTG's P/B has been as high as 1.86 and as low as 1.15, with a median of 1.44.

Finally, investors will want to recognize that MTG has a P/CF ratio of 7.80. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. MTG's P/CF compares to its industry's average P/CF of 9.14. Over the past year, MTG's P/CF has been as high as 14.01 and as low as 7.24, with a median of 9.31.

These figures are just a handful of the metrics value investors tend to look at, but they help show that MGIC Investment is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, MTG feels like a great value stock at the moment.

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

MGIC Investment Corporation (MTG) - free report >>

More from Zacks Tale of the Tape

You May Like

Published in