MGIC (MTG) Up 8.7% Since Last Earnings Report: Can It Continue?

Core Viewpoint - MGIC Investment reported strong third-quarter earnings, surpassing estimates, driven by higher revenues and new insurance written, although some metrics showed slight declines compared to the previous year [2][3][4]. Financial Performance - The operating net income per share for Q3 2024 was 77 cents, exceeding the Zacks Consensus Estimate by 15% and reflecting a year-over-year increase of 20.3% [2]. - Total operating revenues reached $306 million, a 3% increase year-over-year, matching consensus expectations [3]. - New insurance written amounted to $17.2 billion, representing a significant year-over-year growth of 17.8% [7]. Operational Metrics - Insurance in force decreased by 0.5% year-over-year to $292.8 billion, aligning with estimates [4]. - Primary delinquency increased by 1.5% to 25,089 loans [5]. - The loss ratio for the quarter was reported at 4%, compared to 0% in the same quarter of the previous year [9]. Investment Income and Expenses - Net investment income rose by 12.1% year-over-year to $62 million, slightly below estimates [5]. - Net premiums written decreased by 0.2% year-over-year to $234 million, which was lower than the estimated $237.3 million [5]. - Net underwriting and other expenses totaled $53.3 million, reflecting a 0.6% increase year-over-year [8]. Shareholder Returns and Capital Deployment - The company repurchased 5.2 million shares for $122.9 million during Q3 2024 [12]. - In the past 12 months, MGIC paid $650 million in dividends [13]. - An additional 2.9 million shares were repurchased in October for $72.4 million, with a dividend of 13 cents per share declared for payment on November 21, 2024 [14]. Financial Health - Book value per share increased by 19% year-over-year to $20.66 as of September 30, 2024 [10]. - Shareholder equity stood at $5.3 billion, up 4.3% from the end of 2023 [11]. - PMIERs Available Assets totaled $6 billion, exceeding the Minimum Required Assets by $2.5 billion [11]. Market Outlook - Estimates for MGIC have trended downward recently, indicating a potential shift in market sentiment [15][17]. - The stock currently holds a Zacks Rank 3 (Hold), suggesting an expectation of in-line returns in the coming months [17].