MGIC Investment Stock Near 52-Week High: What Should Investors Do?

Core Viewpoint - MGIC Investment Corporation (MTG) is experiencing strong investor confidence, with shares trading near a 52-week high, indicating potential for further price appreciation [1] Price Performance - MTG shares have increased by 23% over the past year, outperforming the industry growth of 11.1% [2] - The Finance sector and S&P 500 composite returned 24.5% and 24.8%, respectively, during the same period [2] Earnings Performance - The company has consistently beaten earnings estimates in the last four quarters, with an average beat of 16.25% [4] Valuation - MGIC Investment shares are trading at a price-to-book multiple of 1.18, which is lower than the industry average of 2.37 [5] - The insurer has a Value Score of B, suggesting it may be wise to take a position before valuation expands [5] Return on Capital - Return on invested capital (ROIC) has been increasing, currently at 11.4%, significantly higher than the industry average of 2.3% [6] Growth Drivers - The company anticipates strong premium writing due to a robust purchase market and potential share gains from the Federal Housing Administration [7] - The insurance-in-force portfolio is expected to grow, supported by new business and increasing annual persistency [8] Claims and Financial Health - MTG has seen a decline in claim filings, which will strengthen its balance sheet and improve its financial profile [9] - The company is enhancing its capital position through capital contributions and reinsurance transactions [10] Future Revenue Estimates - The Zacks Consensus Estimate for MGIC Investment's 2025 revenues indicates a 2.9% increase from the 2024 estimate [11] Conclusion - Improving housing market fundamentals, higher premiums, and outstanding credit quality are expected to drive growth for MGIC Investment [12] - The company recently increased its quarterly dividend by 13%, marking four consecutive years of dividend increases at a compound annual growth rate of 21% [13]