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Here's Why Hold Strategy is Apt for MGIC Investment (MTG)
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MGIC Investment Corporation’s (MTG - Free Report) solid insurance in force, a decline in loss and claims payments, lower delinquency, better housing market fundamentals and prudent capital deployment make it worth retaining in one’s portfolio.
Growth Projections
The Zacks Consensus Estimate for MGIC Investment’s 2024 revenues is pegged at $1.22 billion, implying a year-over-year improvement of 4.7%. The consensus estimate for 2025 earnings per share and revenues indicates an increase of 3.3% and 4.8%, respectively, from the corresponding 2024 estimates.
Earnings Surprise History
MGIC Investment has a decent surprise history, beating earnings estimates in each of the last four quarters, the average surprise being 15.45%.
Northbound Estimate Revision
The Zacks Consensus Estimate for 2024 and 2025 earnings has moved up nearly 3.7% and 2.76%, respectively, in the past 60 days, reflecting investors’ optimism.
Zacks Rank & Price Performance
MGIC Investment currently carries a Zacks Rank #3 (Hold). Year to date, the stock has gained 10.9% compared with the industry’s growth of 7.1%.
Image Source: Zacks Investment Research
Style Score
The insurer has a VGM Score of B. The VGM Score helps identify stocks with the most attractive value, best growth and the most promising momentum.
Business Tailwinds
MGIC Investment has been witnessing an increase in new business written. The insurer expects new business, combined with increasing annual persistency, to result in the continued growth of the insurance-in-force portfolio.
MTG has been witnessing a declining pattern of claim filings. Thus, paid claims are likely to decrease further. A decline in loss and claims will strengthen the balance sheet and improve the insurer’s financial profile.
Banking on capital contribution, reinsurance transactions and cash position, this largest private mortgage insurer in the United States has been improving its capital position. Both leverage and times interest earned ratios have been improving.
The multi-line insurer has been seeing improving housing market fundamentals, such as household formations, home sales and the current capital status. As a result, the company will also be well-positioned to offer credit enhancement and low-down payment solutions to lenders, borrowers and government-sponsored enterprises. MTG remains optimistic about the opportunities in the housing market, which will enable the insurer to serve much more efficiently in the future.
Riding on a solid capital position, the company repurchased shares for $93.3 million, which included commissions. In April 2024, the board approved an additional share repurchase program, authorizing the company to purchase up to $750 million of common stock before Dec 31, 2026. The share repurchase activity reflects continued strong mortgage credit performance and financial results and share price valuation levels that are expected to be attractive to generate long-term value for remaining shareholders.
However, MTG has been witnessing an increase in losses and expenses. Higher expenses lead to margin contraction. The company continues to expect operating expenses in the range of $215-$225 million for 2024.
Radian Group has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 22.79%. Year to date, shares of RDN have gained 8.5%.
The Zacks Consensus Estimate for RDN’s 2024 and 2025 revenues implies year-over-year growth of 8.2% and 4.9%, respectively.
Old Republic International has a solid track record of beating earnings estimates in three of the last four quarters while missing in one, the average being 6.61%. Year to date, shares of ORI have inched up 4.7%.
The Zacks Consensus Estimate for ORI’s 2024 and 2025 earnings implies year-over-year growth of 3.8% and 4.4%, respectively.
EverQuote has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 65.16%. Year to date, shares of EVER have rallied 58%.
The Zacks Consensus Estimate for EVER’s 2024 and 2025 earnings implies year-over-year growth of 103.2% and 276.6%, respectively.
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Here's Why Hold Strategy is Apt for MGIC Investment (MTG)
MGIC Investment Corporation’s (MTG - Free Report) solid insurance in force, a decline in loss and claims payments, lower delinquency, better housing market fundamentals and prudent capital deployment make it worth retaining in one’s portfolio.
Growth Projections
The Zacks Consensus Estimate for MGIC Investment’s 2024 revenues is pegged at $1.22 billion, implying a year-over-year improvement of 4.7%.
The consensus estimate for 2025 earnings per share and revenues indicates an increase of 3.3% and 4.8%, respectively, from the corresponding 2024 estimates.
Earnings Surprise History
MGIC Investment has a decent surprise history, beating earnings estimates in each of the last four quarters, the average surprise being 15.45%.
Northbound Estimate Revision
The Zacks Consensus Estimate for 2024 and 2025 earnings has moved up nearly 3.7% and 2.76%, respectively, in the past 60 days, reflecting investors’ optimism.
Zacks Rank & Price Performance
MGIC Investment currently carries a Zacks Rank #3 (Hold). Year to date, the stock has gained 10.9% compared with the industry’s growth of 7.1%.
Image Source: Zacks Investment Research
Style Score
The insurer has a VGM Score of B. The VGM Score helps identify stocks with the most attractive value, best growth and the most promising momentum.
Business Tailwinds
MGIC Investment has been witnessing an increase in new business written. The insurer expects new business, combined with increasing annual persistency, to result in the continued growth of the insurance-in-force portfolio.
MTG has been witnessing a declining pattern of claim filings. Thus, paid claims are likely to decrease further. A decline in loss and claims will strengthen the balance sheet and improve the insurer’s financial profile.
Banking on capital contribution, reinsurance transactions and cash position, this largest private mortgage insurer in the United States has been improving its capital position. Both leverage and times interest earned ratios have been improving.
The multi-line insurer has been seeing improving housing market fundamentals, such as household formations, home sales and the current capital status. As a result, the company will also be well-positioned to offer credit enhancement and low-down payment solutions to lenders, borrowers and government-sponsored enterprises. MTG remains optimistic about the opportunities in the housing market, which will enable the insurer to serve much more efficiently in the future.
Riding on a solid capital position, the company repurchased shares for $93.3 million, which included commissions. In April 2024, the board approved an additional share repurchase program, authorizing the company to purchase up to $750 million of common stock before Dec 31, 2026. The share repurchase activity reflects continued strong mortgage credit performance and financial results and share price valuation levels that are expected to be attractive to generate long-term value for remaining shareholders.
However, MTG has been witnessing an increase in losses and expenses. Higher expenses lead to margin contraction. The company continues to expect operating expenses in the range of $215-$225 million for 2024.
Stocks to Consider
Some better-ranked stocks from the multi-line insurance industry are Radian Group Inc. (RDN - Free Report) , Old Republic International Corporation (ORI - Free Report) and EverQuote, Inc. (EVER - 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.
Radian Group has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 22.79%. Year to date, shares of RDN have gained 8.5%.
The Zacks Consensus Estimate for RDN’s 2024 and 2025 revenues implies year-over-year growth of 8.2% and 4.9%, respectively.
Old Republic International has a solid track record of beating earnings estimates in three of the last four quarters while missing in one, the average being 6.61%. Year to date, shares of ORI have inched up 4.7%.
The Zacks Consensus Estimate for ORI’s 2024 and 2025 earnings implies year-over-year growth of 3.8% and 4.4%, respectively.
EverQuote has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 65.16%. Year to date, shares of EVER have rallied 58%.
The Zacks Consensus Estimate for EVER’s 2024 and 2025 earnings implies year-over-year growth of 103.2% and 276.6%, respectively.