MGIC Investment Stock Rises 35.3% YTD: More Room for Growth?

Core Viewpoint - MGIC Investment Corporation (MTG) has outperformed the industry, sector, and S&P 500 year-to-date, with a share price increase of 35.3% compared to the industry's 25% growth [1][2]. Company Performance - The company's market capitalization stands at $6.61 billion, with an average trading volume of 0.1 million shares over the last three months. The current stock price is$26.11, slightly below its 52-week high of $26.56 [1]. - MTG has shown solid insurance in force, a decline in loss and claims payments, lower delinquency rates, and better housing market fundamentals, contributing to its stock rally [3]. - The company is trading above its 50-day and 200-day simple moving averages of$25.21 and $22.63, indicating strong upward momentum [4]. Earnings and Growth Projections - MTG has a strong earnings surprise history, beating estimates in the last four quarters with an average surprise of 16.25$1.22 billion, reflecting a 4.5% improvement [6]. - For 2025, the revenue consensus estimate suggests a 3.5% increase from the 2024 estimates [7]. Financial Metrics - The return on invested capital (ROIC) has been increasing, currently at 11.4%, significantly higher than the industry average of 2.5%, indicating efficient fund utilization [8]. - The company is improving its capital position through capital contributions, reinsurance transactions, and cash management, with a solid balance sheet supported by declining claim filings [11]. Capital Management - As of October 31, 2024, MTG has $578.6 million remaining under a$750 million share repurchase program, reflecting strong mortgage credit performance [12]. - The shares are currently undervalued, trading at a price-to-book multiple of 1.28, compared to the industry average of 2.43 [13].