MTG Outperforms Industry, Hits 52-Week High: How to Play the Stock

MGIC Investment Corporation MTG hit a 52-week high of $29.97 on Dec. 29. Shares closed at $29.70 after gaining 25.3% in the past year, outperforming the industry, the sector, and the Zacks S&P 500 Composite.MGIC Investment has outperformed its peers, including Enact Holdings, Inc. ACT, Horace Mann Educators Corporation HMN, and Radian Group Inc. RDN. Shares of ACT, HMN, and RDN have gained 23.8%, 18.7% and 14.4%, respectively, in the past year.Image Source: Zacks Investment ResearchWith a capitalization of $6.84 billion, the average number of shares traded in the last three months was 1.6 million.MTG Trading Above 50-Day and 200-Day Moving AveragesShares of MGIC Investment are trading above the 50-day and 200-day simple moving averages (SMA) of $28.17 and $26.79, respectively, indicating solid upward momentum. SMA is a widely used technical analysis tool to predict future price trends by analyzing historical price data.Image Source: Zacks Investment ResearchMTG Shares Are AffordableMGIC Investment shares are trading at a price-to-book value of 1.29X, lower than the industry average of 2.74X, the Finance sector’s 4.35X, and the Zacks S&P 500 Composite’s 8.6X. 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 CapitalThe return on invested capital (ROIC) has been increasing over the last few quarters, as the company has raised its capital investment during the same period. This reflects MTG’s efficiency in utilizing funds to generate income. ROIC was 11% in the trailing 12 months, better than the industry average of 2%.MTG’s Growth Projection EncouragesThe 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 0.3%. The consensus estimate for 2026 earnings per share and revenues indicates an increase of 0.6% and 2.6%, respectively, from the corresponding 2025 estimates. Earnings have increased 12% in the past five years, better than the industry average of 10.2%.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 estimates for 2025 and two analysts for 2026 over the past 60 days. Thus, the Zacks Consensus Estimate for 2025 and 2026 moved 3.6% and 1.9% north, respectively, in the last 60 days.Image Source: Zacks Investment ResearchFactors Driving 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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(ACT): 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