MTG Near 52-Week High: Time to Buy the Stock for Solid Returns?

Shares of MGIC Investment Corporation MTG closed at $26.61 on Tuesday, near its 52-week high of $26.92. 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 $24.57 and $24.68, 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 $6.31 billion, the average volume of shares traded in the last three months was 2.45 million.

MTG Price Movement vs. 50-Day Moving Average

MTG is an Outperformer

Shares of MGIC Investment have gained 28% in the past year, outperforming its industry, the Finance sector and the Zacks S&P 500 composite’s growth of 6.2%, 18.6% and 12.1%, respectively.

MTG Outperforms Industry and Sector, Outperforms S&P 500 in 1 Year

MTG Shares are Affordable

MGIC Investment shares are trading at a price to forward 12-months earnings of 1.23X, lower than the industry average of 2.45X. Its pricing, at a discount to the industry average, gives a better entry point to investors. Also, it has a Value Score of B. Shares of other insurers like Radian Group Inc. RDN, Assurant, Inc. AIZ and CNO Financial Group, Inc. CNO are trading at a discount to the industry average.

MTG’s Favorable Return on Capital

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 11.4% in the trailing 12 months, better than the industry average of 2%.

MTG’s Growth Projection Encourages

The Zacks Consensus Estimate for 2025 revenues is pegged at $1.25 billion, implying a year-over-year improvement of 2.9%. The consensus estimate for 2026 earnings per share and revenues indicates an increase of 5.9% and 2.9%, respectively, from the corresponding 2025 estimates. 

Earnings have grown 12% in the past five years, better than the industry average of 10.3%.

Earnings Surprise History

MGIC Investment surpassed earnings estimates in each of the last four quarters, the average being 15.88%.

Optimistic Analyst Sentiment on MTG

One out of the three analysts covering the stock has raised estimates for 2025 and 2026 over the past 30 days. Thus, the Zacks Consensus Estimate for 2025 and 2026 moved 1.4% and 2.4% north, respectively, in the last 30 days. 

Key Points to Note for MTG

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 loss 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 $232.9 million remaining in its authorization kitty through December 2026. Its share repurchase activity reflects continued strong mortgage credit performance.

Final Take on MTG

Higher premiums, outstanding credit quality and new business will continue to induce growth for MCIG. As part of wealth distribution to shareholders, MTG also engages in share buyback, 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. Coupled with optimistic analyst sentiment and favorable ROE, the time appears right for potential investors to bet on this Zacks Rank #2 (Buy) insurer. 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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