MGIC Investment Corporation (MTG, Financial) has announced a significant expansion of its share repurchase initiative. The company's board has authorized a new program, allowing for the buyback of up to $750 million of its common stock. This authorization is effective until December 31, 2027, giving the company ample time to execute the repurchases based on market conditions and other strategic considerations.
In addition to the buyback plan, MGIC Investment declared a quarterly cash dividend of $0.13 per share. This dividend is scheduled for distribution on May 21, with eligibility determined by shareholders of record as of May 8.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 6 analysts, the average target price for MGIC Investment Corp (MTG, Financial) is $26.67 with a high estimate of $30.00 and a low estimate of $25.00. The average target implies an upside of 8.36% from the current price of $24.61. More detailed estimate data can be found on the MGIC Investment Corp (MTG) Forecast page.
Based on the consensus recommendation from 7 brokerage firms, MGIC Investment Corp's (MTG, Financial) average brokerage recommendation is currently 3.0, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for MGIC Investment Corp (MTG, Financial) in one year is $21.44, suggesting a downside of 12.88% from the current price of $24.61. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the MGIC Investment Corp (MTG) Summary page.
MTG Key Business Developments
Release Date: February 04, 2025
- Net Income (Q4 2024): $185 million.
- Annualized Return on Equity (Q4 2024): 14%.
- Net Income (Full Year 2024): $763 million, up from $730 million in 2023.
- Insurance in Force (End of Q4 2024): Over $295 billion.
- New Insurance Written (Q4 2024): $16 billion.
- New Insurance Written (Full Year 2024): $56 billion, up 21% from 2023.
- Net Income per Diluted Share (Q4 2024): $0.72, compared to $0.66 in Q4 2023.
- Net Income per Diluted Share (Full Year 2024): $2.89, compared to $2.49 in 2023.
- Favorable Loss Reserve Development (Q4 2024): $54 million.
- Delinquency Rate (Q4 2024): 2.4%, increased by 16 basis points.
- In-force Premium Yield (Q4 2024): 38.6 basis points.
- Book Value per Share (End of Q4 2024): $20.82, up 12% year-over-year.
- Net Investment Income (Q4 2024): $61 million.
- Operating Expenses (Q4 2024): $49 million, down from $55 million in Q4 2023.
- Operating Expenses (Full Year 2024): $218 million, down $19 million from 2023.
- Share Repurchases (Q4 2024): 7.8 million shares for $193 million.
- Common Stock Dividend (Q4 2024): $33 million.
- Dividend from MGIC to Holding Company (Q4 2024): $400 million.
- Remaining Share Repurchase Authorization (As of January 31, 2025): $372 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- MGIC Investment Corp (MTG, Financial) reported a solid fourth quarter with a net income of $185 million and an annualized 14% return on equity.
- The company wrote $16 billion in new insurance in the fourth quarter and $56 billion for the full year, marking a 21% increase from the previous year.
- MGIC Investment Corp returned approximately $700 million to shareholders through stock repurchases and dividends, representing a 92% payout ratio of the year's net income.
- The company's reinsurance agreements reduced PMIERs required assets by $2.2 million or approximately 40% at the end of the fourth quarter.
- Operating expenses were reduced to $49 million in the fourth quarter, down from $55 million in the same period last year, with expectations for further reductions in 2025.
Negative Points
- The account-based delinquency rate increased by 16 basis points to 2.4% in the fourth quarter, influenced by seasonal trends and hurricane-related delinquencies.
- The impact of Hurricanes Helene and Milton resulted in approximately 700 new delinquency notices, adding uncertainty to future credit performance.
- Despite strong operating results, MGIC Investment Corp noted that opportunities for growing insurance in force have been constrained due to market size.
- The book yield on the investment portfolio was flat quarter-over-quarter, with net investment income slightly down by $1 million sequentially.
- Unrealized loss positions on the investment portfolio increased by $129 million due to rising yields across the treasury curve.
