MGIC Investment Corp. (MTG - Free Report) recently announced its November 2018 operating business statistics. Insurance in force was $208.4 billion, up 7.7% year over year. Delinquency loans (loans that failed to pay back) at MGIC Investment declined on a year-over-year basis. Delinquent inventory decreased 29% year over year to 33,314.
MGIC Investment has been severely hit by the financial crisis in 2008. Nonetheless, improving housing market fundamentals, such as household formations and home sales and the current capital status have been aiding the company’s performance over the last several quarters.
Strengthening purchase mortgage market and the mortgage insurer’s solid market share (measured by new insurance written) have been aiding improvement in new business written. Moreover, MGIC Investment expects to have 19-20% of market share in the industry in which it operates. This company is one of the six private mortgage insurers operating in the competitive industry and currently holds 18% market share.
Given the strong purchase market and potential share gain from Federal Housing Administration (FHA), the company expects to write $50 billion new insurance in 2018. Improvement in new business along with expected rise in persistency should lead to increased insurance in force for 2018. MGIC Investment is well poised to benefit from improving housing market fundamentals.
Also, decline in loss and claims will strengthen the company’s balance sheet and hence improve its financial profile.
Shares of MGIC Investment have lost 24.8% in a year compared with the industry’s decline of 20.5% Improving housing market, solid insurance in force and fall in delinquency should help the stock rebound.
MGIC Investment has a Zacks Rank #2 (Buy).
Other Stocks to Consider
Investors interested in multiline industry can look at Cigna Corp (CI - Free Report) , MetLife, Inc. (MET - Free Report) and Radian Group, Inc. (RDN - Free Report) .
Cigna provides health care and related benefits, the majority of which are offered through workplace. The company came up with average four-quarter beat of 13.46%. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
MetLife engages in insurance, annuities, employee benefits, and asset management businesses. The company delivered average four-quarter earnings surprise of 9.67%. The stock carries a Zacks Rank #2.
Radian Group provides mortgage and real estate products and services in the United States. The company pulled off an average four-quarter positive surprise of 11.33%. The stock carries a Zacks Rank #2.
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