MGIC Investment Trades Near 52-Week High: Time to Hold the Stock?

Shares of MGIC Investment Corporation MTG closed at $28.38 on Wednesday, near its 52-week high of $29.01. This proximity underscores investor confidence and indicates further price appreciation. The stock is trading above the 50-day and 200-day simple moving averages (SMAs) of $27.72 and $26.28, 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 $6.54 billion, the average volume of shares traded in the last three months was 1.83 million.Image Source: Zacks Investment ResearchMTG is an OutperformerShares of MGIC Investment have gained 19.7% in the year-to-date period, outperforming its industry, the Finance sector and the Zacks S&P 500 composite’s growth of 5%, 13.2% and 17.6%, respectively.Image Source: Zacks Investment ResearchMGIC Investment has outperformed its peers, including Assurant, Inc. AIZ, Horace Mann Educators Corporation HMN and Radian Group Inc. RDN. Shares of AIZ, HMN and RDN have gained 7.2%, 17.4% and 12%, respectively, year to date.MTG Shares are AffordableMGIC Investment shares are trading at a price-to-book value of 1.23X, lower than the industry average of 2.24X, the Finance sector’s 4.12X and the Zacks S&P 500 composite’s 8.42X. Its pricing, at a discount to the industry average, gives a better entry point to investors. The stock has a Value Score of B. This style score helps find the most attractive value stocks.Image Source: Zacks Investment ResearchMTG’s Favorable Return on CapitalReturn 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. Its ROIC was 11% in the trailing 12 months, better than the industry average of 2%.Growth Projection for MTG EncouragingThe Zacks Consensus Estimate for MGIC Investment's 2025 earnings per share indicates a year-over-year increase of 7.2%. The consensus estimate for 2025 revenues is pegged at $1.22 billion, implying a year-over-year improvement of 0.4%. The consensus estimate for 2026 earnings per share and revenues indicates an increase of 0.4% and 2.6%, respectively, from the corresponding 2025 estimates. Earnings have grown 12% in the past five years, better than the industry average of 9.8%.Earnings Surprise HistoryMGIC Investment surpassed earnings estimates in each of the last four quarters, the average being 14.21%.Optimistic Analyst Sentiment on MTGEach of the three analysts covering the stock has raised earnings estimates for 2025, and two analysts have raised the same for 2026 over the past 30 days. Thus, the Zacks Consensus Estimate for 2025 and 2026 earnings moved 3.6% and 1.9% north, respectively, in the past 30 days.Key Points to Note for MTGNew 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. As of Sept. 30, 2025, MTG had remaining authorization to repurchase $614 million of common stock under the existing share repurchase program through Dec. 31, 2027. Its share repurchase activity reflects continued strong mortgage credit performance.Wrapping UpHigher 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). 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(RDN): Free Stock Analysis Report Horace Mann Educators Corporation (HMN): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks