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Shares of MGIC Investment Corporation MTG closed at $27.75 on Thursday, near its 52-week high of $29.01. This proximity underscores investor confidence. It has the ingredients for further price appreciation. The stock is trading above the 50-day and 200-day simple moving averages (SMA) of $27.60 and $25.68, respectively, indicating solid upward momentum. SMA is a widely used technical analysis tool to predict future price trends by analyzing historical price data.
With a market capitalization of $6.39 billion, the average volume of shares traded in the last three months was 2.18 million.
Shares of MGIC Investment have gained 17.1% in the year-to-date period, outperforming its industry, the Finance sector and the Zacks S&P 500 composite’s growth of 6.7%, 13.8% and 15.2%, respectively.
MGIC Investment has outperformed its peers, including Enact Holdings, Inc. ACT, Horace Mann Educators Corporation HMN, and Old Republic International Corporation ORI. Shares of ACT, HMN, and ORI have gained 80.5%, 27.7% and 177%, respectively, year to date.
MGIC Investment shares are trading at a price to forward 12-month earnings of 9.09X, higher than the industry average of 8.85X.
Return on invested capital (ROIC) has been increasing over the last few quarters as the company raised its capital investment over the same time frame. This reflects MTG’s efficiency in utilizing funds to generate income. ROIC was 11.2% in the trailing 12 months, better than the industry average of 1.9%.
The Zacks Consensus Estimate for MGIC Investment's 2025 earnings per share indicates a year-over-year increase of 3.4%. The consensus estimate for 2025 revenues is pegged at $1.23 billion, implying a year-over-year improvement of 0.9%. The consensus estimate for 2026 earnings per share and revenues indicates an increase of 1.99% and 1.95%, respectively, from the corresponding 2025 estimates.
Earnings have grown 12% in the past five years, better than the industry average of 9.8%.
MGIC Investment surpassed earnings estimates in each of the last four quarters, the average being 14.12%.
One out of the three analysts covering the stock has raised estimates for 2025 over the past 60 days. Thus, the Zacks Consensus Estimate for 2025 moved 2.7% north in the last 60 days.
New business and solid annual persistency should drive the insurance-in-force portfolio. A higher level of new and existing home sales, an increased percentage of homes purchased for cash, and an improved level of refinance activity should help MGIC Investment grow.
MTG has been witnessing a declining pattern of claim filings. A decline in losses and claims will strengthen the balance sheet and improve this mortgage insurer’s financial profile.
The largest mortgage insurer in the United States is improving its capital position with capital contributions, reinsurance transactions, and cash position. Both leverage and times interest earned ratios have been improving.
A solid capital position supports MTG in wealth distribution. The company currently has $742.2 million remaining in its authorization kitty through December 2026. Its share repurchase activity reflects continued strong mortgage credit performance.
Higher premiums, outstanding credit quality, and new business will continue to induce growth for MGIC Investment. As part of wealth distribution to shareholders, MTG also engages in share buybacks, reflecting capital strength, financial results, and share price levels that are expected to be attractive to generate long-term value for shareholders.
Its solid growth projections as well as attractive valuations are other positives. Optimistic analyst sentiment and favorable ROIC should continue to benefit MGIC Investment over the long term. The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
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