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1. Company Snapshot

1.a. Company Description

MGIC Investment Corporation, through its subsidiaries, provides private mortgage insurance, other mortgage credit risk management solutions, and ancillary services to lenders and government sponsored entities in the United States, Puerto Rico, and Guam.The company offers primary mortgage insurance that provides mortgage default protection on individual loans, as well as covers unpaid loan principal, delinquent interest, and various expenses associated with the default and subsequent foreclosure.It also provides contract underwriting services, as well as reinsurance.


The company serves originators of residential mortgage loans, including savings institutions, commercial banks, mortgage brokers, credit unions, mortgage bankers, and other lenders.MGIC Investment Corporation was founded in 1957 and is headquartered in Milwaukee, Wisconsin.

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1.b. Last Insights on MTG

MGIC Investment Corporation's recent performance faced challenges due to a revenue miss in Q4 2025, despite beating earnings estimates. The company's revenue dipped due to lower premiums, offsetting gains in investment income. Additionally, Ballast Asset Management LP decreased its stake in the company by 36.2% during Q2 2025. However, Alps Advisors Inc. increased its stake by 60.6% in Q3 2025. The company's insurance in-force grew year-over-year, but its Q4 earnings beat was largely driven by a 4.2% year-over-year increase in EPS.

1.c. Company Highlights

2. MGIC Investment Corporation Delivers Strong Q4 2025 Results

MGIC Investment Corporation reported a robust fourth quarter 2025, with earnings per diluted share of $0.75, beating analyst estimates of $0.73. Net income for the quarter was $169 million, resulting in an annualized return on equity of 13%. For the full year, net income was $738 million, with a return on equity of 14.3%. The company's book value per share grew to $23.47, a 13% increase year-over-year, driven by strong financial performance.

Publication Date: Feb -15

📋 Highlights
  • Q4 Net Income & ROE:: $169M net income, 13% annualized return on equity, with $0.75 EPS (up from $0.68 in prior quarter).
  • Book Value Growth:: Book value per share rose to $23.47, a 13% YoY increase, driven by capital gains and operational performance.
  • Insurance In Force Expansion:: $303B insurance in force (+3% YoY), with $17B new insurance written in Q4 and $60B annually.
  • Shareholder Returns:: $915M returned via $189M share repurchases (6.8M shares) and $33M dividend, reducing shares outstanding by 12%.
  • Reinsurance Strengthening:: $250M excess of loss transaction and 40% quota share deal to enhance risk management and coverage through 2027.

Insurance in Force and Revenue Growth

The company's insurance in force grew to over $303 billion, up 3% from the prior year, with $17 billion of new insurance written in the quarter and $60 billion for the full year. The company expects insurance in force to remain relatively flat in 2026, with a stable in-force premium yield of around 38 basis points. Investment income was $62 million, with a book yield of 4%.

Capital Management and Shareholder Returns

The company returned $915 million to shareholders in 2025, reducing shares outstanding by 12% through the repurchase of 6.8 million shares for $189 million and payment of a quarterly dividend of $33 million. The company also strengthened its reinsurance program with a $250 million excess of loss transaction and a 40% quota share transaction.

Valuation and Dividend Yield

With a Price-to-Book Ratio of 0.91 and a Dividend Yield of 2.1%, the company's valuation appears reasonable, considering its strong financial performance and robust capital position. The current ROE of 13.36% supports the dividend yield, indicating a stable return for investors.

Outlook and Credit Trends

The company expects operating expenses to decline to a range of $190 to $200 million in 2026. Analysts estimate revenue growth at 2.8% for next year. The company is focused on building a strong, well-diversified insurance portfolio, with an average credit score at origination of 748, indicating solid near-term credit trends.

3. NewsRoom

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Reviewing SiriusPoint (NYSE:SPNT) and MGIC Investment (NYSE:MTG)

Mar -09

Source: defenseworld.net

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Caprock Group LLC Invests $1.46 Million in MGIC Investment Corporation $MTG

Feb -15

Source: defenseworld.net

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Assetmark Inc. Boosts Stake in MGIC Investment Corporation $MTG

Feb -14

Source: defenseworld.net

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Alps Advisors Inc. Buys 264,968 Shares of MGIC Investment Corporation $MTG

Feb -09

Source: defenseworld.net

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MGIC Investment (NYSE:MTG) versus Legal & General Group (OTCMKTS:LGGNY) Financial Contrast

Feb -06

Source: defenseworld.net

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MGIC Investment Corporation (MTG) Q4 2025 Earnings Call Transcript

Feb -03

Source: seekingalpha.com

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MGIC Q4 Earnings Beat Estimates, Revenues Miss, Insurance in Force Up Y/Y

Feb -03

Source: zacks.com

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MGIC (MTG) Reports Q4 Earnings: What Key Metrics Have to Say

Feb -03

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.00%)

6. Segments

Mortgage Insurance

Expected Growth: 3.0%

MGIC Investment Corporation's 3.0% growth in Mortgage Insurance is driven by increasing demand for private mortgage insurance, expansion into new markets, and a favorable regulatory environment. Additionally, the company's strong risk management practices, diversified product offerings, and strategic partnerships contribute to its growth momentum.

7. Detailed Products

Private Mortgage Insurance

MGIC Investment Corporation provides private mortgage insurance to lenders and investors, protecting them from default-related losses on residential mortgage loans.

Mortgage Guaranty Insurance

MGIC offers mortgage guaranty insurance, which provides coverage to lenders and investors in the event of borrower default.

Risk Management Solutions

MGIC provides risk management solutions to lenders and investors, helping them to identify and manage credit risk in their mortgage portfolios.

Portfolio Retention

MGIC's portfolio retention services help lenders to retain mortgage servicing rights and manage their portfolios more effectively.

8. MGIC Investment Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for MGIC Investment Corporation is medium due to the presence of alternative mortgage insurance providers. However, the company's strong brand recognition and established relationships with lenders mitigate this threat to some extent.

Bargaining Power Of Customers

The bargaining power of customers is low for MGIC Investment Corporation, as the company's products are essential for lenders to manage risk. Additionally, the company's large market share and established relationships with lenders reduce the bargaining power of customers.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low for MGIC Investment Corporation, as the company is not heavily reliant on a single supplier. The company's diversified supply chain and strong relationships with suppliers reduce the bargaining power of suppliers.

Threat Of New Entrants

The threat of new entrants is low for MGIC Investment Corporation, as the mortgage insurance industry has high barriers to entry. The company's strong brand recognition, established relationships with lenders, and regulatory requirements create significant obstacles for new entrants.

Intensity Of Rivalry

The intensity of rivalry is medium for MGIC Investment Corporation, as the company operates in a competitive industry with several established players. However, the company's strong market position, diversified product offerings, and established relationships with lenders help to mitigate the intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 11.25%
Debt Cost 7.26%
Equity Weight 88.75%
Equity Cost 10.11%
WACC 9.79%
Leverage 12.68%

11. Quality Control: MGIC Investment Corporation passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Quality: 8.8

Yield: 7.0

Momentum: 7.5

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MGIC

A-Score: 6.9/10

Value: 6.7

Growth: 6.4

Quality: 8.2

Yield: 4.0

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Volatility: 9.3

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Quality: 9.0

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A-Score: 6.1/10

Value: 6.1

Growth: 6.1

Quality: 6.3

Yield: 4.0

Momentum: 6.0

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

26.39$

Current Price

26.39$

Potential

-0.00%

Expected Cash-Flows