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Why Is MGIC (MTG) Up 2.7% Since Last Earnings Report?
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It has been about a month since the last earnings report for MGIC Investment (MTG - Free Report) . Shares have added about 2.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is MGIC due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
MGIC Investment reported second-quarter 2024 operating net income per share of 77 cents, which beat the Zacks Consensus Estimate by 24.2%. Moreover, the bottom line increased 13.2% year over year.
MGIC Investment recorded total operating revenues of $306 million, which increased 3.4% year over year on higher net investment income, other revenues and premiums earned. The top line beat the consensus mark by 0.6%.
The quarterly results reflected higher premiums written, improved net investment income and lower underwriting and other expenses, partially offset by lower insurance in force.
Operational Update
Insurance in force decreased 0.3% from the prior-year quarter to $291.6 billion, which missed the Zacks Consensus Estimate of $295.26 billion.
The insurer witnessed a 1.9% year-over-year decrease in primary delinquency to 23,370 loans.
Net premiums written increased 0.9% year over year to $233.5 million. The figure was lower than our estimate of $238.5 million.
Net investment income increased 17.5% year over year to $61.5 million. Our estimate was $58 million.
Persistency — the percentage of insurance remaining in force from one year prior — was 85.4% as of Jun 30, 2024, down from 85.9% reported in the year-ago quarter.
New insurance written was $13.5 billion, up 8.8% year over year. Our estimate was $10 billion.
Net underwriting and other expenses totaled $54.8 million, down 3.1% year over year.
For the quarter under review, the loss ratio was negative 7.5% compared with negative 7.3% for the second quarter of 2023.
Financial Update
Book value per share, a measure of net worth, increased 5.2% from 2023-end to $19.58 as of Jun 30, 2024.
Shareholder equity was $5.1 billion as of Jun 30, 2024, up 0.8% from 2023-end.
MGIC's PMIERs Available Assets totaled $5.8 billion or $2.4 billion above its Minimum Required Assets as of Jun 30, 2024.
Assets were $6.5 billion as of Jun 30, 2024, down 0.2% from the 2023-end level. Debt was $644 million as of Jun 30, 2024, which remained unchanged from the 2023-end level.
Capital Deployment
MGIC Investment repurchased 7.6 million shares using $157 million of holding company cash.
In April 2024, the board approved an additional share repurchase program that authorized it to purchase up to $750 million of shares prior to Dec 31, 2026.
Through Jul 26, 2024, MTG repurchased an additional 2.2 million shares of using $49 million of holding company cash.
The board of directors approved a 13% increase to its quarterly dividend to 13 cents per share. The dividend will be paid out on Aug 22, 2024, to shareholders of record at the close of business on Aug 8, 2024.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
The consensus estimate has shifted 5.82% due to these changes.
VGM Scores
Currently, MGIC has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise MGIC has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
MGIC belongs to the Zacks Insurance - Multi line industry. Another stock from the same industry, The Hartford (HIG - Free Report) , has gained 6% over the past month. More than a month has passed since the company reported results for the quarter ended June 2024.
The Hartford reported revenues of $4.46 billion in the last reported quarter, representing a year-over-year change of +9.4%. EPS of $2.50 for the same period compares with $1.88 a year ago.
For the current quarter, The Hartford is expected to post earnings of $2.46 per share, indicating a change of +7.4% from the year-ago quarter. The Zacks Consensus Estimate has changed -1.6% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for The Hartford. Also, the stock has a VGM Score of C.
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Why Is MGIC (MTG) Up 2.7% Since Last Earnings Report?
It has been about a month since the last earnings report for MGIC Investment (MTG - Free Report) . Shares have added about 2.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is MGIC due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
MGIC Investment Beats Q2 Earnings, Raises Dividend
MGIC Investment reported second-quarter 2024 operating net income per share of 77 cents, which beat the Zacks Consensus Estimate by 24.2%. Moreover, the bottom line increased 13.2% year over year.
MGIC Investment recorded total operating revenues of $306 million, which increased 3.4% year over year on higher net investment income, other revenues and premiums earned. The top line beat the consensus mark by 0.6%.
The quarterly results reflected higher premiums written, improved net investment income and lower underwriting and other expenses, partially offset by lower insurance in force.
Operational Update
Insurance in force decreased 0.3% from the prior-year quarter to $291.6 billion, which missed the Zacks Consensus Estimate of $295.26 billion.
The insurer witnessed a 1.9% year-over-year decrease in primary delinquency to 23,370 loans.
Net premiums written increased 0.9% year over year to $233.5 million. The figure was lower than our estimate of $238.5 million.
Net investment income increased 17.5% year over year to $61.5 million. Our estimate was $58 million.
Persistency — the percentage of insurance remaining in force from one year prior — was 85.4% as of Jun 30, 2024, down from 85.9% reported in the year-ago quarter.
New insurance written was $13.5 billion, up 8.8% year over year. Our estimate was $10 billion.
Net underwriting and other expenses totaled $54.8 million, down 3.1% year over year.
For the quarter under review, the loss ratio was negative 7.5% compared with negative 7.3% for the second quarter of 2023.
Financial Update
Book value per share, a measure of net worth, increased 5.2% from 2023-end to $19.58 as of Jun 30, 2024.
Shareholder equity was $5.1 billion as of Jun 30, 2024, up 0.8% from 2023-end.
MGIC's PMIERs Available Assets totaled $5.8 billion or $2.4 billion above its Minimum Required Assets as of Jun 30, 2024.
Assets were $6.5 billion as of Jun 30, 2024, down 0.2% from the 2023-end level. Debt was $644 million as of Jun 30, 2024, which remained unchanged from the 2023-end level.
Capital Deployment
MGIC Investment repurchased 7.6 million shares using $157 million of holding company cash.
In April 2024, the board approved an additional share repurchase program that authorized it to purchase up to $750 million of shares prior to Dec 31, 2026.
Through Jul 26, 2024, MTG repurchased an additional 2.2 million shares of using $49 million of holding company cash.
The board of directors approved a 13% increase to its quarterly dividend to 13 cents per share. The dividend will be paid out on Aug 22, 2024, to shareholders of record at the close of business on Aug 8, 2024.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
The consensus estimate has shifted 5.82% due to these changes.
VGM Scores
Currently, MGIC has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise MGIC has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
MGIC belongs to the Zacks Insurance - Multi line industry. Another stock from the same industry, The Hartford (HIG - Free Report) , has gained 6% over the past month. More than a month has passed since the company reported results for the quarter ended June 2024.
The Hartford reported revenues of $4.46 billion in the last reported quarter, representing a year-over-year change of +9.4%. EPS of $2.50 for the same period compares with $1.88 a year ago.
For the current quarter, The Hartford is expected to post earnings of $2.46 per share, indicating a change of +7.4% from the year-ago quarter. The Zacks Consensus Estimate has changed -1.6% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for The Hartford. Also, the stock has a VGM Score of C.