MGIC Investment Corporation (MTG) | Investment Case

1. Company Snapshot

1.a. Company Description

MGIC Investment Corporation, through its subsidiaries, provides private mortgage insurance, other mortgage credit risk management solutions, and ancillary services to lenders and government sponsored entities in the United States, Puerto Rico, and Guam.The company offers primary mortgage insurance that provides mortgage default protection on individual loans, as well as covers unpaid loan principal, delinquent interest, and various expenses associated with the default and subsequent foreclosure.It also provides contract underwriting services, as well as reinsurance.

The company serves originators of residential mortgage loans, including savings institutions, commercial banks, mortgage brokers, credit unions, mortgage bankers, and other lenders.MGIC Investment Corporation was founded in 1957 and is headquartered in Milwaukee, Wisconsin.

Show Full description

1.b. Last Insights on MTG

MGIC Investment Corporation's recent performance faced challenges due to a revenue miss in Q4 2025, despite beating earnings estimates. The company's revenue dipped due to lower premiums, offsetting gains in investment income. Additionally, Ballast Asset Management LP decreased its stake in the company by 36.2% during Q2 2025. However, Alps Advisors Inc. increased its stake by 60.6% in Q3 2025. The company's insurance in-force grew year-over-year, but its Q4 earnings beat was largely driven by a 4.2% year-over-year increase in EPS.

1.c. Company Highlights

Last Price	26.84
Change Percentage	0.83%
Open	26.74
Previous Close	26.62
Market Cap ( Millions)	6005
Volume	1452996
Year High	29.97
Year Low	21.94
M A 50	28.05
M A 200	27.31

FCF Yield	10.35%
Dividend Yield	2.09%
ROE	13.36%
Debt / Equity	9.73%
Net Debt / EBIDTA	28.15%
Price To Book	0.91
Price Earnings Ratio	8.21
Price To FCF	9.66
Price To sales	4.95
EV / EBITDA	6.53

2. MGIC Beats Earnings Expectations on Strong Underwriting Performance

MGIC reported a net income of $191 million for the third quarter, translating to an annualized return on equity of 14.8%. Earnings per diluted share came in at $0.83, beating analyst estimates of $0.72. The company's adjusted net operating income was also $0.83 per diluted share, up from $0.77 in the same period last year. Revenue growth was driven by the company's leadership in the private mortgage insurance market, with a robust capital position and disciplined underwriting.

Publication Date: Nov -02

                                    📋 Highlights
                                    Net Income Growth:
                                                Q3 net income of $191 million with 14.8% annualized ROE
Earnings Per Share:
                                                $0.83/share (vs $0.77/share in Q3 2022)
Capital Efficiency:
                                                Reinsurance program reduced PMIERs required assets by $2.5B (43% reduction)
Capital Returns:
                                                $400 million dividend to holding company due to $6 billion balance sheet capital
Provision Adjustments:
                                                $47 million favorable reserve development offset new claim notices (7.5% rate)

                                

Capital Position and Reinsurance

The company's reinsurance program reduced its PMIERs required assets by $2.5 billion, or approximately 43%. MGIC's capital structure remains robust, with $6 billion in balance sheet capital. The company paid a $400 million dividend to the holding company, reflecting capital levels above its target. As Nathaniel Colson, CFO, noted, "Our approach has been pretty consistent over time, which is really around maintaining the right financial strength at the operating company."

Market Outlook and Competition

The company is seeing modest improvements in home affordability driven by easing mortgage rates and slower national home price appreciation. Despite potential new entrants into the private mortgage insurance market, MGIC remains confident in its competitive position. As Timothy Mattke, CEO, stated, "We're aware that someone is looking at potentially entering the market... but it's tough to say" whether they will ultimately join the market.

Valuation

MGIC's shares trade at a Price-to-Book Ratio of 1.22, indicating a relatively modest premium to its book value. The company's Dividend Yield is 1.97%, providing a stable source of return for investors. With analysts estimating revenue growth of 3.5% next year, the stock appears reasonably valued, with a P/E Ratio of 8.34. The company's strong underwriting performance and robust capital position support its current valuation.

3. NewsRoom

Alps Advisors Inc. Buys 264,968 Shares of MGIC Investment Corporation $MTG

Feb -09

Source: defenseworld.net

MGIC Investment (NYSE:MTG) versus Legal & General Group (OTCMKTS:LGGNY) Financial Contrast

Feb -06

Source: defenseworld.net

MGIC Investment Corporation (MTG) Q4 2025 Earnings Call Transcript

Feb -03

Source: seekingalpha.com

MGIC Q4 Earnings Beat Estimates, Revenues Miss, Insurance in Force Up Y/Y

Feb -03

Source: zacks.com

MGIC (MTG) Reports Q4 Earnings: What Key Metrics Have to Say

Feb -03

Source: zacks.com

MGIC: Loss Fears Likely Cap Upside

Feb -02

Source: seekingalpha.com

MGIC Investment (MTG) Q4 Earnings Beat Estimates

Feb -02

Source: zacks.com

MGIC Investment Corporation Reports Fourth Quarter 2025 Results

Feb -02

Source: prnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.00%)

6. Segments

Mortgage Insurance

Expected Growth: 3.0%

MGIC Investment Corporation's 3.0% growth in Mortgage Insurance is driven by increasing demand for private mortgage insurance, expansion into new markets, and a favorable regulatory environment. Additionally, the company's strong risk management practices, diversified product offerings, and strategic partnerships contribute to its growth momentum.

7. Detailed Products

Private Mortgage Insurance

MGIC Investment Corporation provides private mortgage insurance to lenders and investors, protecting them from default-related losses on residential mortgage loans.

Mortgage Guaranty Insurance

MGIC offers mortgage guaranty insurance, which provides coverage to lenders and investors in the event of borrower default.

Risk Management Solutions

MGIC provides risk management solutions to lenders and investors, helping them to identify and manage credit risk in their mortgage portfolios.

Portfolio Retention

MGIC's portfolio retention services help lenders to retain mortgage servicing rights and manage their portfolios more effectively.

8. MGIC Investment Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for MGIC Investment Corporation is medium due to the presence of alternative mortgage insurance providers. However, the company's strong brand recognition and established relationships with lenders mitigate this threat to some extent.

Bargaining Power Of Customers

The bargaining power of customers is low for MGIC Investment Corporation, as the company's products are essential for lenders to manage risk. Additionally, the company's large market share and established relationships with lenders reduce the bargaining power of customers.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low for MGIC Investment Corporation, as the company is not heavily reliant on a single supplier. The company's diversified supply chain and strong relationships with suppliers reduce the bargaining power of suppliers.

Threat Of New Entrants

The threat of new entrants is low for MGIC Investment Corporation, as the mortgage insurance industry has high barriers to entry. The company's strong brand recognition, established relationships with lenders, and regulatory requirements create significant obstacles for new entrants.

Intensity Of Rivalry

The intensity of rivalry is medium for MGIC Investment Corporation, as the company operates in a competitive industry with several established players. However, the company's strong market position, diversified product offerings, and established relationships with lenders help to mitigate the intensity of rivalry.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	11.25%
Debt Cost	7.26%
Equity Weight	88.75%
Equity Cost	10.11%
WACC	9.79%
Leverage	12.68%

11. Quality Control: MGIC Investment Corporation passed 7 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Enact Holdings

A-Score: 7.5/10

Value: 7.1

Growth: 4.6

Quality: 8.8

Yield: 7.0

Momentum: 7.5

Volatility: 10.0

1-Year Total Return ->

Fidelity National Financial

A-Score: 7.0/10

Value: 7.9

Growth: 6.2

Quality: 6.3

Yield: 8.0

Momentum: 5.0

Volatility: 8.7

1-Year Total Return ->

MGIC

A-Score: 6.9/10

Value: 6.7

Growth: 6.4

Quality: 8.2

Yield: 4.0

Momentum: 7.0

Volatility: 9.3

1-Year Total Return ->

Radian Group

A-Score: 6.3/10

Value: 6.0

Growth: 2.9

Quality: 8.1

Yield: 6.0

Momentum: 5.5

Volatility: 9.0

1-Year Total Return ->

NMI Holdings

A-Score: 6.2/10

Value: 6.9

Growth: 7.6

Quality: 9.0

Yield: 0.0

Momentum: 4.5

Volatility: 9.0

1-Year Total Return ->

Assurant

A-Score: 6.1/10

Value: 6.1

Growth: 6.1

Quality: 6.3

Yield: 4.0

Momentum: 6.0

Volatility: 8.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

7.60%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

9.79%

MGIC Investment Corporation - US5528481030

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on MTG

1.c. Company Highlights

Better Quality

Medium Volatility

Stable Momentum

Earnings Beats

Revenues Miss

Strong Momentum

Revenues Beats

Fairly Valued

Average Growth

Less Volatile

2. MGIC Beats Earnings Expectations on Strong Underwriting Performance

Capital Position and Reinsurance

Market Outlook and Competition

Valuation

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.00%)

6. Segments

Mortgage Insurance

Expected Growth: 3.0%

7. Detailed Products

Private Mortgage Insurance

Mortgage Guaranty Insurance

Risk Management Solutions

Portfolio Retention

8. MGIC Investment Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: MGIC Investment Corporation passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

26.84$

Current Price

26.84$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA