Key Takeaways MTG expects stronger insurance-in-force growth supported by new business and solid persistency. Higher home sales, more cash purchases, and better refi activity are aiding MTG's expansion. MTG's capital strength enables significant buybacks, with $614M authorized through 2027. 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 ab ...

Core Insights - MGIC Investment (MTG) is currently viewed as a better value opportunity compared to Zurich Insurance Group Ltd. (ZURVY) based on various financial metrics and analyst outlooks [1][3][7] Valuation Metrics - MTG has a forward P/E ratio of 9.18, significantly lower than ZURVY's forward P/E of 16.01, indicating that MTG may be undervalued [5] - The PEG ratio for MTG is 1.47, while ZURVY's PEG ratio is 1.70, suggesting MTG has a more favorable valuation when considering expected earnings growth [5] - MTG's P/B ratio stands at 1.22, compared to ZURVY's P/B of 3.86, further highlighting MTG's relative undervaluation [6] Analyst Outlook - MTG has a Zacks Rank of 2 (Buy), indicating a positive earnings estimate revision activity, while ZURVY has a Zacks Rank of 4 (Sell), reflecting a less favorable analyst outlook [3][7] - The improving earnings outlook for MTG positions it as a superior value option in the current market [7]

Core Insights - MGIC Investment (MTG) is currently rated 2 (Buy) while Zurich Insurance Group Ltd. (ZURVY) is rated 4 (Sell), indicating a stronger earnings outlook for MTG compared to ZURVY [3] Valuation Metrics - MTG has a forward P/E ratio of 9.09, significantly lower than ZURVY's forward P/E of 15.97, suggesting MTG may be undervalued [5] - The PEG ratio for MTG is 1.45, while ZURVY's PEG ratio is 1.70, indicating MTG has a more favorable earnings growth outlook relative to its valuation [5] - MTG's P/B ratio stands at 1.21, compared to ZURVY's P/B of 3.85, further supporting the notion that MTG is undervalued [6] Value Grades - Based on the valuation metrics, MTG has earned a Value grade of B, while ZURVY has a Value grade of C, reinforcing MTG's position as the superior value option [6][7]

Financial Data and Key Metrics Changes - The company recorded net income of $191 million for the third quarter, with an annualized return on equity of 14.8%, demonstrating the durability of its business model [5] - Book value per share increased to $22.87, up 11% compared to the previous year [5] - The company returned $918 million of capital to shareholders through dividends and share repurchases, reducing outstanding shares by 12% [5][8] Business Line Data and Key Metrics Changes - The company achieved over $300 billion of insurance in force, marking a significant milestone [6] - New insurance written (NIW) was $16.5 billion, reflecting high-quality business with strong credit characteristics [6] Market Data and Key Metrics Changes - The in-force premium yield was 38.3 basis points, remaining relatively flat throughout the year [13] - Investment income for the quarter was $62 million, with a book yield on the investment portfolio at 4% [13] Company Strategy and Development Direction - The company maintains a strategy focused on operational excellence, disciplined execution, and sustainable long-term value for stakeholders [5] - The capital management strategy includes supporting prudent growth, maintaining a low to mid-teens debt to capital ratio, and ensuring a healthy liquidity buffer [7] Management's Comments on Operating Environment and Future Outlook - Management noted modest improvements in home affordability due to easing mortgage rates and a slow increase in purchase applications [17] - The company remains committed to working with industry stakeholders to make homeownership more accessible while protecting taxpayers from mortgage credit risk [17] Other Important Information - The company paid a $400 million dividend to the holding company, enhancing liquidity and financial flexibility [9] - Operating expenses decreased to $50 million from $53 million in the same quarter last year, with expectations to remain within the previously communicated range for the full year [14] Q&A Session Summary Question: Provision per loan on new notices - The provision for new notices was consistent with previous quarters, with a new notice claim rate of 7.5% [20] Question: Credit scores and PMIERS - The company is actively monitoring the situation regarding credit scores and is prepared to adapt to industry changes [21] Question: Increased competition in the MI space - Management acknowledged awareness of potential new entrants but emphasized the challenges these entrants would face in meeting PMI requirements [23] Question: Capital return strategy - The company maintains a consistent approach to capital return, balancing dividends and share repurchases based on financial strength and market conditions [25][26] Question: Persistency trends and market opportunities - Persistency was viewed as flat, with recent upticks in refinance transactions noted; the company continuously evaluates market opportunities based on economic value [29][32]

Risk in Force - The original risk written in 2025 was $113 billion, with 965% remaining[6] - The original risk written in 2004 and prior was $1815 billion, with 02% remaining[6] - The weighted average FICO score for 2025 originations is 755, with 508% having a FICO score of 760 and above[6] - The weighted average LTV for 2025 originations is 931%, with 46% having an LTV of 85 or less[6] Delinquency and Losses - The risk in force delinquent is 20%[7] - The number of new notices received in the quarter is 13,582[7,11] - Ever-to-date claims paid for 2005-2008 originations is $133953 million[7] Risk Distribution and Capital - Total PMIERs Primary Minimum Required Assets is $5849 billion[9] - The company ceded 43% of its risk through various reinsurance agreements[9] - Scheduled Contingency Reserve Releases for 2025 is $457 million[26], but as of September 30, 2025, the contingency reserve releases totaled $338 million[27] Losses Incurred - Current period losses incurred, net, are $58 million[11] - Losses incurred, net, are $11 million[11]

Group 1 - MGIC Investment (MTG) shares have gained approximately 6% over the past year, but have recently pulled back from highs due to concerns about a slowing housing market [1] - MGIC reported solid performance in its latest financial results, indicating resilience despite market challenges [1]

Group 1 - MGIC Investment (MTG) shares have gained approximately 6% over the past year, but have recently pulled back from highs due to concerns about a slowing housing market [1] - MGIC reported solid financial results, indicating resilience despite market challenges [1]

Core Insights - MGIC Investment reported a revenue of $304.34 million for the quarter ended September 2025, reflecting a decrease of 0.6% year-over-year, while EPS increased to $0.83 from $0.77 in the previous year [1] - The revenue fell short of the Zacks Consensus Estimate of $307.8 million, resulting in a surprise of -1.12%, whereas the EPS exceeded expectations with a surprise of +15.28% against a consensus estimate of $0.72 [1] Financial Performance Metrics - The combined ratio for the insurance segment was reported at 25.6%, significantly better than the average estimate of 36.8% from two analysts [4] - The GAAP underwriting expense ratio was 21.1%, compared to the average estimate of 19.5% [4] - The GAAP loss ratio stood at 4.5%, well below the average estimate of 17.3% [4] - Net premiums earned were $241.75 million, slightly below the average estimate of $243.92 million, marking a year-over-year decline of 0.7% [4] - Other revenue was reported at $0.38 million, significantly lower than the estimated $0.57 million, representing a year-over-year decrease of 39.5% [4] - Net investment income was $62.21 million, slightly below the estimate of $63.36 million, with a year-over-year increase of 0.2% [4] Stock Performance - Over the past month, MGIC shares have returned -5.6%, contrasting with the Zacks S&P 500 composite's increase of +3.8% [3] - The stock currently holds a Zacks Rank 2 (Buy), suggesting potential for outperformance in the near term [3]

Core Insights - MGIC Investment (MTG) reported quarterly earnings of $0.83 per share, exceeding the Zacks Consensus Estimate of $0.72 per share, and showing an increase from $0.77 per share a year ago, resulting in an earnings surprise of +15.28% [1] - The company posted revenues of $304.34 million for the quarter ended September 2025, which fell short of the Zacks Consensus Estimate by 1.12% and decreased from $306.07 million year-over-year [2] - MGIC has surpassed consensus EPS estimates for the last four quarters but has not beaten revenue estimates during the same period [2] Earnings Outlook - The immediate price movement of MGIC shares will largely depend on management's commentary during the earnings call and future earnings expectations [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.73, with projected revenues of $309.33 million, while the estimate for the current fiscal year is $3.01 on $1.23 billion in revenues [7] Industry Context - The Zacks Industry Rank places the Insurance - Multi line sector in the top 26% of over 250 Zacks industries, indicating a favorable outlook for stocks within this category [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked using tools like the Zacks Rank [5][6]

Financial Performance - The company reported a net income of $X million for Q3 2025, representing a Y% increase compared to Q3 2024[6] - Net income for Q3 2025 was $191,095,000, down from $199,969,000 in Q3 2024, reflecting a decrease of 4.4%[32] - Comprehensive income for Q3 2025 was $236,843,000, compared to $328,963,000 in Q3 2024, a decline of 28%[32] - Net income for the nine months ended September 30, 2025, was $569,037 thousand, compared to $578,294 thousand for the same period in 2024, reflecting a decrease of about 1.4%[36] - Total revenues for the nine months ended September 30, 2025, reached $914,984,000, compared to $906,287,000 for the same period in 2024, indicating a year-over-year increase of 1.9%[30] - Total revenues for Q3 2025 were $304,505,000, a decrease from $306,649,000 in Q3 2024, with investment income net of expenses at $62,210,000, slightly up from $62,093,000[30] Premiums and Insurance Metrics - New Insurance Written (NIW) for the quarter was $Z billion, reflecting a growth of A% year-over-year[6] - Net premiums written for Q3 2025 were $235,228,000, a slight increase from $234,006,000 in Q3 2024, representing a growth of 0.5%[30] - Direct premiums earned for Q3 2025 were $285.7 million, slightly up from $284.4 million in Q3 2024, while net premiums earned were $241.8 million compared to $243.3 million[54] - The company reported a loss ratio of 4.5% for Q3 2025, compared to 4.0% in Q3 2024, indicating a slight increase in the proportion of losses relative to premiums earned[30] - The delinquency rate for insured loans decreased to B%, down from C% in the previous quarter[6] Expenses and Losses - The loss ratio for the quarter was D%, compared to E% in the same period last year[6] - Losses incurred, net for Q3 2025 were $10,928,000, compared to a loss of $9,842,000 in Q3 2024, indicating an increase in losses[30] - The company’s total losses and expenses for Q3 2025 amounted to $69,444,000, compared to $52,353,000 in Q3 2024, reflecting higher operational costs[30] - Losses incurred for the current year as of September 30, 2025, were $154,162,000, slightly down from $158,317,000 in 2024[132] Assets and Liquidity - The total assets available to pay claims were reported at $G billion, ensuring strong liquidity[6] - Cash and cash equivalents at the end of Q3 2025 were $271,792,000, down from $299,609,000 at the end of Q3 2024[36] - Total shareholders' equity as of September 30, 2025, was $5,172,699,000, a decrease from $5,294,076,000 as of September 30, 2024[34] - The company’s available assets exceeded its minimum required assets as of September 30, 2025, ensuring compliance with the GSEs' PMIERs[42] Shareholder Actions - The company repurchased common stock worth $599,453,000 during the nine months ended September 30, 2025[36] - In the nine months ended September 30, 2025, the company repurchased 23.4 million shares for $592.9 million, with remaining authorization to repurchase $614 million of common stock through December 31, 2027[139] - Cash dividends paid in the first half of 2025 were $0.13 per share, increasing to $0.15 per share in the third quarter, with a similar dividend declared for November 2025[140] - The company paid a total dividend of $400 million to the holding company in the nine months ended September 30, 2025, with an additional $400 million paid in October 2025[147] Technology and Market Expansion - Ongoing development of new technology solutions is expected to enhance underwriting efficiency and reduce costs[6] - The company plans to expand its market presence by entering H new states by the end of 2025[6] - The company has initiated discussions for potential acquisitions to strengthen its competitive position in the market[6] Investment Performance - Investment income, net of expenses, for the nine months ended September 30, 2025, was $184,648,000, slightly up from $183,316,000 in the same period of 2024[30] - The company reported net gains on investments of $162 for the three months ended September 30, 2025, compared to $583 for the same period in 2024[97] - The fair value of equity securities as of September 30, 2025, was $15,286, compared to $14,762 as of December 31, 2024, reflecting a slight increase[95] Regulatory Compliance and Accounting - The company is evaluating the impacts of new accounting standards (ASU 2023-09 and ASU 2024-03) but does not expect them to have a material impact on disclosures[46][47] - MGIC is in compliance with its debt covenants as of September 30, 2025[50] - As of September 30, 2025, MGIC's Available Assets exceed its Minimum Required Assets, ensuring compliance with GSEs' PMIERs[42]